On January 1, 2023, the Social Security Administration officially raised the wage cap to $160,200. This is almost a 9% increase from 2022’s cap of $147,000. Any earnings above the $160,200 cap are no longer subject to Social Security payroll tax.

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Employers should be sure to:

• Update their payroll systems accordingly to account for the higher taxable wage base.
• Notify employees of the new adjustment and how it will affect their payroll. Employees who earn more than the wage cap may have a decreased net take-home pay starting this month.

You can learn more by reading the full official press release on the Social Security Administration’s website.

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