Per Diem Rates from the U.S. General Services Administration
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Rates are set by fiscal year, effective October 1 each year. Find current rates in the continental United States ("CONUS Rates").
Social Security and Medicare Taxes
Who Pays Social Security and Medicare Taxes?
Employees, employers, and self-employed persons pay social security and Medicare taxes.
When referring to employees, these taxes are commonly called FICA taxes (Federal Insurance Contributions Act). When referring to self-employed persons, these same taxes are referred to as self-employment taxes, which are figured on Schedule SE by self-employed individuals.
If a person has a job and is also self-employed, the gross compensation from the job plus net income from self-employment are added together and counted toward the maximum social security wage base for the tax year
Social Security Wage Base:
- 2023 wage base: $160,200
- 2022 wage base: $147,000
- 2021 wage base: $142,800
- 2020 wage base: $137,700
- 2019 wage base: $132,900
- 2018 wage base: $128,400
- 2017 wage base: $127,200
Medicare Taxes: Every dollar of wages, salary, bonuses, and other compensation is subject to Medicare taxes. Unlike the income limitation for Social Security taxes, there is no income limitation for Medicare taxes.
2023 Social Security and Medicare Tax Rates
- Total Social Security Rate for 2023 is 12.4%.
- Employer pays 50% (6.2%) of gross earnings
- Employee pay 50% (6.2%) of gross earnings, subject to the annual earnings limitation.
- Total Medicare Rate for 2023 is 2.9%.
- Employer pays 50% (1.45%) of gross earnings (no earnings limitation)
- Employee pays 50% (1.45%) of gross earnings (no earnings limitation)
Self-Employed Persons:
The self-employment tax rate for 2023 is 15.3%. This rate equals the total social security rate of 12.4% plus the total Medicare rate of 2.9%. Unlike employers and employees, who each pay one-half of the social security and Medicare tax rates, self-employed persons pay both halves, 15.3%.
Trust Fund Taxes
A trust fund tax is money withheld from an employee's wages by an employer and held in trust until paid to the Treasury. Trust fund taxes include income taxes, Social Security taxes, and Medicare taxes.
Congress has established large penalties for delays in turning over employment taxes to the Treasury. In addition, if you intentionally don't turn these taxes over to the U.S. Treasury, you can face criminal prosecution.
Using a payroll service is a low cost and effective way of handling the complexities involved in payroll processing and avoiding stiff noncompliance penalties. A payroll preparation service will do the tax computations, file the quarterly and annual payroll tax returns, remit payroll taxes to the IRS on your behalf, issue paychecks and provide you with periodic payroll reports for your records.