2021 Social Security Cost-of-Living Adjustment

2021 Social Security Cost-of-Living Adjustment

The Social Security Administration announced a 1.3% cost of living adjustment for 2021.  The Social Security wage base in 2021 will increase to $142,800 from the 2020 wage level of $137,700.  The combined Social Security and Medicare tax rate remains at 7.65% - the Social Security portion is 6.2% on wages up to the applicable maximum taxable amount; the Medicare portion is 1.45% on all wages.  Additional adjustments are included in the SSA’s Fact Sheet, 2021 Social Security Changes.

As a reminder, the Affordable Care Act imposes an additional 0.9% Medicare tax on high wage earners, applicable on earnings in excess of $200,000 in a calendar year.  A set of FAQs about this additional tax is available from the IRS.

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2021 Social Security Cost-of-Living Adjustment~/Portals/0/PackFlashItemImages/WebReady/Social Security COLA.jpghttps://www.cbiz.com/Portals/0/liquidImages/WebReady/Social Security COLA.jpgThe Social Security Administration announced a 1.3% inflationary adjustment applicable to the maximum amount of earnings subject to the Social Security tax for 2021. ...2020-11-03T21:09:50-05:00

The Social Security Administration announced a 1.3% inflationary adjustment applicable to the maximum amount of earnings subject to the Social Security tax for 2021.