Social Security Administration Announces 2023 Wage Base and Cost of Living Adjustment

Recently, the Social Security Administration (SSA) published their annual release detailing changes to the Social Security wage base and the cost-of-living adjustment (COLA) for Social Security and Supplemental Security Income (SSI) benefits. Click here to read the SSA release in full.

In a helpful article published by the Journal of Accountancy, Martha Waggoner details the key details of the SSA release:

2023 Wage Base – For 2023, individual taxable earnings of up to $160,2000 will be subject to the Social Security tax (an increase of $13,200 from 2022).

Key Tax Rates

  • The old age, survivors, and disability insurance (OASDI) tax rate is 6.2% for both employees and employers (12.4% for self-employed individuals)
  • The Medicare hospital insurance tax rate, which has no wage limit, remains at 1.45% for both employees and employers (2.9% for self-employed individuals)
  • Taxpayers with earned income greater than $200,000 for individuals/$250,000 for married filing jointly/$125,000 for married filing separately are responsible for an additional hospital insurance tax of 0.9%.

2023 COLA Adjustment – Recipients of both Social Security and SSI benefits will see an increase of 8.7% starting in January 2023 (as compared to a 5.9% increase in 2022 and a 1.3% increase in 2021).

For further details regarding the SSA release, click here to read the article in full.