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The maximum amount of earnings subject to Social Security tax (OASDI) will increase to $184,500 in 2026, up from $176,100 in 2025. While the contribution rate remains unchanged at 6.20% for both employers and employees (12.4% for self-employed individuals), the higher wage base increases the maximum annual OASDI contributions to $11,439 per employee and employer (up from $10,918.20). This change affects employees whose annual earnings exceed the prior cap and all employers withholding FICA taxes.
Effective January 1, 2026, the maximum amount of earnings subject to Social Security tax (OASDI) in the United States will increase to USD 184,500, up from USD 176,100 in 2025. While the contribution rate remains unchanged at 6.20% for both employers and employees, the higher wage base increases the maximum annual OASDI contributions to USD 11,439 per employee and employer, up from USD 10,918.20.
Who is affected
This change affects all U.S. employers withholding Federal Insurance Contributions Act (FICA) taxes, particularly those with employees whose annual earnings exceed USD 176,100. Employees earning above the prior cap will see increased Social Security withholdings. Self-employed individuals are also impacted, as they pay the combined 12.4% OASDI rate on earnings up to the same wage cap.
What's changing
The Old-Age, Survivors, and Disability Insurance (OASDI) program is a federal social insurance program that provides financial assistance to eligible retirees, disabled individuals, and survivors of deceased workers. The annual wage base is adjusted to reflect changes in the national average wage index.
| Component | 2026 | 2025 |
|---|---|---|
| Maximum Taxable Earnings | USD 184,500 per year | USD 176,100 per year |
| Employer Rate | 6.20% | 6.20% |
| Employee Rate | 6.20% | 6.20% |
| Maximum Employer Contribution | USD 11,439 per employee per year | USD 10,918.20 per employee per year |
| Maximum Employee Contribution | USD 11,439 per year | USD 10,918.20 per year |
| Self-Employed Rate | 12.4% | 12.4% |
What NEO partners and clients should do
- Update payroll systems to reflect the new USD 184,500 wage base by January 1, 2026
- Recalculate OASDI withholdings for employees earning above USD 176,100 annually
- Adjust employer contribution budgets to account for the increased maximum of USD 11,439 per affected employee
- Communicate the change to employees whose take-home pay will be impacted by higher withholdings
