Additional Changes for 2013 Withholding

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With the expiration of the Social Security tax rate holiday set to expire at the end of 2012, the Social Security Administration has just announced in increase to the wage base for computing Social Security tax (OASDI). The wage base is set to increase to $113,700 up from the 2012 wage base of $110,100; that’s a 3.27% increase. This means taxpayers could see an additional $2,425.20 withheld from their W-2. This increase is based on the increase of the nation’s average total wages.

Below is a snapshot of what employees can expect to have withheld starting January 1, 2013:

  • 6.2% Social Security tax on the first $113,700 (increase from 2012 of 4.2% on $110,100)
  • 1.45% Medicare tax on the first $200,000 ($250,000 for Joint filers)
  • 2.35% (1.45% Medicare tax + 0.9% additional Medicare Tax) on those wages in excess of $200,000 ($250,000 for Joint filers)