Social Security wage base rises to $106,800 for 2009
by TedSocial Security’s Old-Age, Survivors, and Disability Insurance (OASDI) program limits the amount of earnings subject to taxation for a given year. The same annual limit also applies when those earnings are used in a benefit computation. This limit increases each year with increases in the national average wage index. We call this annual limit the contribution and benefit base. For earnings in 2009, this base is $106,800.
The OASDI tax rate for wages paid in 2009 is set by statute at 6.2 percent for employees and employers, each. Thus, an individual with wages equal to or larger than $106,800 would contribute $6,621.60 to the OASDI program in 2009, and his or her employer would contribute the same amount. The OASDI tax rate for self-employment income in 2009 is 12.4 percent.
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