December 20, 2011
I Heard that the 2011 FICA Tax Rate Will Be the Same
The Social Security tax rate paid by the employer is 6.20% and the employee will also pay 6.20%. The maximum Social Security tax that employees and employers will each pay in 2011 is $6,621.60.Now if you’re self-employed you will pay the entire amount of applicable tax.
2011 Social Security Payroll Tax Limit
The 2011 FICA tax rate can sometimes be referred to as the payroll tax or the self-employment tax depending on your employment status. This is your contribution to Social Security and Medicare as a percentage of your salary. As you know, we all have to pay in while we are working in order to collect when we are older. Hopefully the money will still be there for us.
Calculating Payroll Tax Limits
The income limit for Social Security tax is $106,800; this means that if you have a higher income than $106,800 you will only be taxed on the $106,800. This limit is the same limit that was in place in 2009. At this time, there is no limit to the wages subject to the Medicare tax. All wages are still subject to the 1.45% tax.
The total FICA tax rate is 7.65%, which includes the Social Security tax rate of 6.2% and the Medicare tax rate of 1.45%. The maximum amount of Social Security tax employees and employers will each pay is $6,621.60 in 2010.
When self-employed, you can expect to have the same income limit of $106,800. Also, there is no limit on self-employment wages that are subject to the Medicare tax.
