The Social Security payroll tax (OASDI) remains at 6.2% for employees and 6.2% for employers.
However, the taxable wage cap has increased, meaning that higher-earning workers will see more of their pay subject to this tax before it stops for the year.
- For 2025, the taxable maximum is set at $176,100.
- For 2026, it will rise again to $184,500.
If you earn more than those amounts, your Social Security tax withholding will last longer and your annual tax burden will increase.
Approximately 6% of workers typically earn above the cap, so while most people won’t feel much of a change, those who do earn higher incomes will be impacted.
Quick numbers at a glance
| Year | Social Security taxable maximum | Employee rate | Max employee OASDI tax | Employer rate | Max employer OASDI tax |
|---|---|---|---|---|---|
| 2024 | $168,600 | 6.2% | $10,453.20 | 6.2% | $10,453.20 |
| 2025 | $176,100 | 6.2% | $10,918.20 | 6.2% | $10,918.20 |
| 2026 | $184,500 | 6.2% | $11,439.00 | 6.2% | $11,439.00 |
Note: The Medicare tax remains at 1.45% for both employee and employer, with no wage cap. There is also an Additional Medicare Tax of 0.9% that applies to employee wages above $200,000 (once certain thresholds are met).
How this could change your paycheck
If you earn at or below the cap
Your withholding for Social Security will follow the standard 6.2% up to the new cap. Since the cap simply has increased, your pay-stub will reflect this for the portion of your wages that are taxed.
If you earn above the cap
- In 2025 you’ll pay up to $10,918.20 in Social Security tax as an employee—up from the previous year’s maximum.
- In 2026 the maximum rises to $11,439.00, meaning you’ll pay roughly $520.80 more in that year compared to 2025 if you hit the cap.
- Your employer will owe the same amounts on its side (6.2% up to the cap).
- Even after hitting the Social Security cap, you’ll continue to pay Medicare taxes on all of your wages: 1.45% plus the 0.9% Additional Medicare Tax (if you cross the $200k threshold).
Why the cap keeps moving
The taxable maximum for Social Security is adjusted annually based on nationwide wage trends. This means as average salaries rise, so does the cap.
The recent jump from $168,600 up to $176,100 (and then to $184,500) reflects this adjustment.
Will this help your future benefit?
Paying more in Social Security tax may increase your future benefit if those higher earnings count among your best 35 years of inflation-adjusted earnings.
But there is still a maximum monthly benefit you can receive at full retirement age or age 70. So, while higher earnings can improve your benefit up to a point, they don’t mean unlimited benefit growth.
Practical tips to manage the change
- Check your pay-stub early in the year to verify your year-to-date Social Security (OASDI) withholding and Medicare withholding.
- If you’re a high earner, budget for the fact that your Social Security withholding will continue for more of the year than it might have in prior years when the cap was lower.
- If you’re self-employed, you’ll pay the full 12.4% OASDI tax (plus Medicare) on your net earnings up to the cap. Half of the self-employment tax is deductible when calculating your income tax.
The main rate for your Social Security payroll tax (6.2%) remains unchanged. What’s new is the taxable wage cap, which rises to $176,100 in 2025 and $184,500 in 2026.
This means workers above those thresholds will see higher annual payroll taxes—up to $10,918.20 in 2025 and $11,439.00 in 2026 for the employee portion.
For most people earning below the cap, little will change. For high-earners, it means planning ahead for a longer withholding period and adjusting your budget accordingly.
Ultimately, paying more may slightly increase future benefits, but there is a ceiling to how much you can gain.
FAQs
What’s the Social Security payroll tax cap for 2025 and 2026?
The cap is $176,100 for 2025 and will rise to $184,500 for 2026. Above those thresholds, you won’t pay the 6.2% Social Security tax on additional wages for that year.
Does the Medicare tax have a cap?
No. The Medicare tax of 1.45% applies to all wages without limit. In addition, the Additional Medicare Tax of 0.9% applies to employees earning above $200,000 (based on filing status) and is withheld once that threshold is crossed.
Will more payroll tax mean higher future benefits?
Potentially yes. If your higher earnings are among your best 35 years and used in the formula that calculates your benefit, your eventual Social Security benefit could be higher. But you’re still limited by the maximum monthly benefit so gains only go so far.