What is the employer's Social Security tax rate for 2016?
The employer's Social Security tax rate for 2016 is 6.2% of each employee's first $118,500 of wages, salaries, etc. If an employee's wages, salaries, etc. are greater than $118,500, the amount that is in excess of $118,500 is not subject to the Social Security tax. Hence, the maximum amount of the employer's Social Security tax for each employee in 2016 is $7,347 (6.2% X $118,500). (The percentage and the earnings limit are unchanged from 2015.)
(Employees also pay a Social Security tax. In effect, the employer is matching each employee's Social Security tax.)
In addition to the Social Security tax, there is a Medicare tax of 1.45% (and a Medicare surtax for higher income taxpayers). The employer will have to match each employee's 1.45% Medicare tax, but does not have to match the Medicare surtax. Information on the Medicare surtax can be found at www.irs.gov.