The Social Security taxable maximum will be $168,600 until December 31, 2024. Following that date, the new taxable maximum for 2025 will rise significantly. As a result, certain high-income individuals whose jobs pay Social Security taxes may be required to pay additional taxes.
Keep in mind that the taxable maximum is the annual income limit for which payroll taxes are applied. As a result, incomes beyond this amount will not be taxed in 2025.
Which will be Social Security’s taxable maximum in 2025?
Beginning January 1, 2025, all employees will be subject to the new taxed maximum of $176,100. If your earnings exceed that amount, you will only be taxed on the first $176,100.
The COLA increase will be around 2.5% for all Social Security claimants. However, the taxable maximum has seen a considerably larger increase, 4.45%. High earners will need to budget for the extra money they will spend on taxes in 2025.
Here is the evolution of the taxable maximum in the last decade:
- 2015: 118,500
- 2016: 118,500
- 2017: 127,200
- 2018: 128,400
- 2019: 132,900
- 2020: 137,700
- 2021: 142,800
- 2022: 147,000
- 2023: 160,200
- 2024: 168,600
- 2025: 176,100
What is the maximum amount of money workers can pay to Social Security?
If you earn $168,600 in 2024, you will be required to pay Social Security taxes of up to $10,453. Remember that employers and employees each pay the Social Security Administration 6.2 percent of their wages (up to the taxable maximum of $168,600 in 2024).
American workers who make $176,100 will be required to pay up to $10,918. As a result, it represents an increase of around $465 per year in 2025. Without a question, it might be a significant sum of money if you have a very strict budget despite earning a high income.
Don’t forget that Social Security payouts are supported by workers who are already paying taxes. So, people receiving retirement benefits receive the money that other workers pay in taxes.
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