Change #4 The Taxable Wage Base Rises to $184,500

What Changed

Social Security payroll taxes do not apply to all earned income — they are capped at a maximum earnings level that is adjusted annually in line with national wage trends. In 2026, the Social Security taxable wage base increased by $8,400, from $176,100 in 2025 to $184,500.

This means that workers and employers each pay the 6.2% Social Security portion of FICA taxes on earnings up to $184,500 in 2026. Earnings above that threshold are not subject to Social Security payroll taxes for the remainder of the tax year. Self-employed individuals pay the full combined rate of 12.4% on earnings up to the taxable maximum.

In concrete dollar terms, a worker earning at or above the new taxable maximum will pay a total of $11,439 in Social Security payroll taxes in 2026 — $520.80 more than in 2025. Their employer contributes an identical matching amount.

For self-employed individuals, the total Social Security self-employment tax on earnings at the wage cap rises to $22,878, an increase of $1,041.60. It is important to note that the Medicare tax has no wage cap — the 1.45% Medicare portion of FICA applies to all earnings without limit, and high earners (above $200,000 for single filers, $250,000 for joint filers) pay an additional 0.9% Medicare surtax on earnings above those thresholds.

Key Insight: The Social Security tax cap of $184,500 in 2026 means high earners effectively receive an “end date” to Social Security payroll taxes each year. A worker earning $250,000 annually will reach the Social Security tax cap partway through the calendar year and stop paying Social Security taxes on subsequent earnings — though Medicare taxes continue without limit.