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What is the employer's Social Security tax rate for 2018?

The employer's Social Security tax rate for 2018 (January 1 through December 31, 2018) is 6.2% of each employee's first $128,400 of wages, salaries, etc. If an employee's 2018 wages, salaries, etc. are greater than $128,400, the amount in excess of $128,400 is not subject to the Social Security tax. Hence, the maximum amount of the employer's Social Security tax for each employee in 2018 is $7,960.80 (6.2% X $128,400).

[The employer's Social Security tax rate for 2017 was 6.2% of each employee's first $127,200 of wages, salaries, etc. If an employee's wages, salaries, etc. were greater than $127,200, the amount in excess of $127,200 was not subject to the Social Security tax. Hence, the maximum amount of the employer's Social Security tax for each employee in 2017 was $7,886.40 (6.2% X $127,200).]

Since employees also pay a Social Security tax, the employer is in effect 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.