Building Your Business Business Taxes Social Security Maximum Taxable Earnings 2022 What Businesses and Individuals Need to Know About Maximum Tax Limits By Jean Murray Jean Murray Facebook Twitter Jean Murray, MBA, Ph.D., is an experienced business writer and teacher who has been writing for The Balance on U.S. business law and taxes since 2008. She has taught accounting, business law, and business finance at business and professional schools for over 35 years, has authored several books on saving money and simplifying your business, and was the owner of startup-focused company Emence Enterprises, LLC. learn about our editorial policies Updated on October 14, 2022 Fact checked by Sarah Fisher Fact checked by Sarah Fisher Sarah Fisher is an associate editor at The Balance with two years of personal finance and business writing experience. She has written about personal finance for SmartAsset, and has held internships at the Consumer Financial Protection Bureau and Senator Kirsten Gillibrand's office. learn about our editorial policies In This Article View All In This Article Current Maximums What Is Social Security Withholding? Rules About Social Security Maximums FAQs Photo: Kameleon007/E+/Getty Images Each year the Social Security Administration unveils benefit amounts and the maximum amount of earnings that are subject to Social Security taxes based on cost-of-living increases. This formula affects how much can be withheld from employees' paychecks to pay Social Security taxes. Employers are also on the hook for their share of Social Security taxes. Current Social Security Maximum Taxable Earnings The Social Security maximum taxable income for 2022 is $147,000. The Social Security maximum taxable income for 2023 is $160,200. This maximum includes both employee wages and income from self-employment. There is no maximum taxable income for Medicare withholding. What Is Social Security Withholding? The Social Security tax is a federal tax imposed on employers, employees, and self-employed individuals. It is used to pay the cost of benefits for Social Security recipients, survivors of recipients, and disabled individuals and is referred to as OASDI, or Old-Age, Survivors and Disability Insurance. The Social Security tax is one of the payroll taxes paid by employees, employers, and self-employed individuals each year known as FICA (Federal Insurance Contributions Act) taxes. Medicare tax is the other tax in this package. There is no maximum taxable income for the Medicare tax, but there is an additional Medicare tax of 0.9% for high-income single taxpayers with earned income of more than $200,000 (and more than $250,000 for married couples filing jointly). The Social Security tax rate for both single and married taxpayers is 2022 is 12.4%; both the employer and the employee pay 6.2% of the employee's salary. The standard Medicare rates are 1.45% for each, for a total of 2.9%. Therefore, the total FICA tax amount is 15.3%. Note If you are self-employed, you must pay the full 15.3% yourself, but you can take a deduction for half this amount (the employer-equivalent portion of the tax). Rules About Social Security Maximums If the employee makes more than the maximum taxable income level set by the Social Security Administration, different rules regarding withholding come into effect. Employer The employer must withhold Social Security and Medicare taxes from employees on pay subject to Social Security, up to the maximum amount each year. They must pay Social Security taxes for each employee for earnings up to the Social Security maximum. Employee The Social Security cap is the maximum amount that your employer will withhold from your paychecks during the year. If you have more than one job, each employer will withhold up to the maximum. Note If too much Social Security tax has been withheld, you can claim a refund from the IRS of those Social Security taxes withheld that exceeded the maximum amount when you file your tax return the following year. Self-Employed Worker If you are self-employed, you must pay Social Security and Medicare taxes on your self-employment earnings, which are your net earnings on your business tax return. Since you are not an employee, these amounts aren't withheld during the year. You must estimate the self-employment tax and income tax you owe from business earnings and make quarterly estimated payments. For example, if your only income in 2022 is from self-employment, and the net earnings you report on your business tax form are $145,000, your Social Security and Medicare taxes would apply to the 2022 maximum of $147,000. Note If you have both self-employment income and income as an employee of a company, the employee income is considered first when it comes to arriving at the Social Security maximum. If the maximum taxable amount isn't reached from your employee salary or wages alone, then your income from self-employment is added in. FAQs What is the maximum Social Security retirement benefit in 2022? The maximum Social Security benefit depends on your age in 2022. If you are full retirement age when you retire, your maximum benefit is $3,345. (Your full retirement age depends on when you were born.) That amount goes up to $4,194 if you're 70 when you retire in 2022. What is the Additional Medicare Tax? This tax goes toward funding parts of the Affordable Care Act and charges taxpayers an additional 0.9% on all income above a certain threshold. For individuals, that threshold amount is $200,000 a year; for married couples filing jointly, it's $250,000. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Social Security Administration. "2023 Social Security Changes." Internal Revenue Service. "What Is the Additional Medicare Tax?" Internal Revenue Service. "Topic No. 751 Social Security and Medicare Withholding Rates." Internal Revenue Service. "Self-Employment Tax (Social Security and Medicare Taxes)." Social Security Administration. "Maximum Taxable Earnings." Social Security Administration. "What Is the Maximum Social Security Retirement Benefit Payable?"