Social Security, Medicare, Self-Employment Tax Rates and Wage Base

Social Security, Medicare, Self-employment Tax Rates

Year

Soc Sec employer/employee 12.4%

Medicare Rate employer/employee 2.9%

Self-employment Rate
15.3%
2016 6.2% each 1.45% each 15.3%
2015 6.2% each 1.45% each 15.3%
2014 6.2% each 1.45% each 15.3%

Employers and employees:

The total Social Security rate is 12.4%. The employer and each employee pays one-half, or 6.2% each.

The total Medicare rate is 2.9%. The employer and each employee pays one-half, or 1.45% each.

Self-employed Persons:

The self-employment tax rate is 15.3%. This equals the total Social Security rate of 12.4% plus the total Medicare rate of 2.9%. So, while employers and employees each pay one half of the Social Security and Medicare tax rates, self-employed individuals pay both halves. However, one-half of the self-employment tax is deductible as an above-the-line deduction on Form 1040, line 27.

Social Security Wage Base

The 2016 and 2015 Social Security wage base is 118,500. By law, the wage base for 2016 years remained unchanged because there was no COLA.

2014: $117,000

No Compensation Limit for Medicare:

Every dollar of wages, salaries, bonuses, and other compensation are subject to Medicare tax. Unlike the Social Security tax limitation, there is no compensation limitation for Medicare.