8571 / What are the Social Security and Medicare tax rates for traditional employees and employers?
Although the Social Security tax rate is much higher than the Medicare tax rate, it only applies to wages that do not exceed the earnings cap (as adjusted annually for inflation). Therefore, wages in excess of the cap amount are not subject to Social Security tax. For 2024, the Social Security tax does not apply to wages in excess of $168,600.3 Thus, the maximum amount of Social Security tax liability for the combined employee and employer share is $20,906.40 (12.4% * $168,600), or $10,4537.20 each.
On the other hand, there is no cap on the Medicare tax. This means the combined employer/employee 2.9 percent tax rate will be imposed on all wages without limit. Therefore, for 2024, although the imposition of Social Security tax ceases to apply to wages in excess of $168,600, the Medicare tax continues to be imposed on all wages. Moreover, effective for tax years beginning after December 31, 2012, there is an additional Medicare surtax of 0.9 percent added to the 1.45 percent rate on the employee portion of the Medicare tax for certain high-income taxpayers (see Q 8657).