The Social Security Administration has increased the maximum taxable earnings cap for 2015 to $118,500, up from $117,000 in 2014.
After an employee has reached $118,500 in gross wages, employers are no longer required to withhold Social Security tax.
If an employee changes jobs and works for more than one employer in a calendar year, each employer must withhold Social Security taxes, regardless of what a previous employer withheld and the amount of total income the employee has made year to date. The employee may then have taxes withheld for the year that exceed the maximum.
Social Security withholding is mandatory, and employees may not exempt themselves.
Questions on withholding taxes? Call managestaff. We’ll help answer them.