Q: How much does a person have to earn in 2015 before withholding for Social Security taxes end?
A: In 2015, the maximum amount of earnings subject to Social Security tax is $118,500. In 2014, this amount was $117,000. People earning above the annual maximum taxable level stop paying SSA payroll tax once that amount is reached.
Of the estimated 168 million workers who will pay Social Security taxes in 2015, about 10 million will pay higher taxes because of the increase in the taxable maximum. Medicare payroll tax continues on all earnings.
The taxable earnings level can change annually based on changes in the national average wage index. To reflect the general rise in the standard of living over a working lifetime, changes to this average wage index are used when future SSA benefits are computed.
From 1937 to 2015, changes to the amount of earnings subject to Social Security earnings tax are here.
The 2015 Social Security tax is set by statute at 6.2 percent for employees and employers, each. An individual with wages equal to or larger than $118,500 will pay $7,347.00 towards the SSA retirement, survivors and disability programs in 2015, and his or her employer would contribute the same amount. The tax rate for self-employment income in 2015 is 12.4 percent.
People earning less than the 2014 maximum tax base will not pay more in 2015 because SSA and Medicare tax rates are not changing. They have not changed since 1990.
The Medicare tax rate is an additional 1.45 percent on all earnings so the total employee and employer tax rate is 7.65 percent. For the self-employed, it is 15.30 percent.
Historical Social Security and Medicare tax rates are here.