Surprise, the new threshold is higher than previously predicted:

The SSA will raise the social security wage base to $106,800 for TY ’09. That’s an increase of $4,800 from TY ’08.

That’s $300 more than the Social Security trustees had told us to expect this past spring.

As before, all wages, without limit, are subject to the 1.45% Medicare tax. The FICA rate (social security tax and Medicare tax) remains at 7.65%. Other amounts are going up too. The FICA coverage threshold will go up by $100 in 2009. So, for domestic employees, will be $1,700 and for election workers it’ll be $1,500. 

Visit the Social Security Administration’s site for more details.

Tags: Employment Taxes, FICA, Medicare tax, Payroll, Social Security, Tax compliance