OASDI Limit 2026: Max Social Security Tax and Wage Base

Key Takeaways

• For 2026, Social Security tax, formally Old-Age, Survivors, and Disability Insurance (OASDI), applies to the first $184,500 of each employee's wages, which is the 2026 wage base. At 6.2%, that caps the tax at $11,439.00 for the employee and $11,439.00 for the employer. For 2025, the prior year, the wage base was $176,100 and the cap was $10,918.20 on each side.
• The rate itself has not moved. Social Security is 6.2% withheld from the employee and 6.2% paid by the employer in both years, and only the wage base changes. Medicare adds 1.45% each way on every dollar, with no wage base at all.
• The employer's share stops where the employee's stops. Once you have paid an employee up to the wage base for the year, you stop withholding their 6.2% and you stop paying your own 6.2% on that person until January.
• Each employer applies the cap to its own payroll. An employee with two jobs can go over the annual maximum across both, and they claim the excess back on their own tax return. You do not refund it.
• Social Security wages are not the same as gross pay. Salary an employee puts toward health coverage through a section 125 cafeteria plan is left out, while 401(k) deferrals and any cash taken instead of a benefit still count. Box 3 of Form W-2 reports the result, capped at the wage base.

Updated: September 2026

Social Security tax is 6.2% withheld from the employee and 6.2% paid by the employer. In 2026, it applies to the first $184,500 of each employee's wages, which caps it at $11,439.00 on each side. In 2025, the wage base was $176,100 and the cap was $10,918.20 on each side. Medicare adds 1.45% each way on every dollar, with no wage base at all.

We keep the 2025 figures on this page as well, because payroll corrections, amended returns, and corrected W-2s for last year still need them. Below are the rates and limits for both years side by side, what the cap does to your own share as the employer, and what happens when someone works two jobs.

US Payroll at a Glance

The Social Security tax rate is 6.2% each for employers and employees in both 2026 and 2025. Only the wage base moves: $184,500 for 2026 and $176,100 for 2025, both published by the Internal Revenue Service (IRS) in Publication 15, Circular E, dated December 15, 2025. Medicare adds 1.45% on all wages with no cap. You also withhold an employee-only 0.9% Additional Medicare Tax once an employee's wages with you pass $200,000 in the year, whatever their filing status, but the tax itself applies above $250,000 for married couples filing jointly, $125,000 for married filing separately, and $200,000 for every other filing status. You withhold these Federal Insurance Contributions Act (FICA) taxes and report them quarterly on Form 941 and annually on Form W-2.

 

I. FICA Rates and Limits for 2026 and 2025

Under FICA, payroll taxes fund retirement, disability, and survivor benefits (OASDI) as well as Medicare. Every figure in the table below comes from the IRS. The 2026 rates and the $184,500 wage base are in Publication 15 (2026), dated December 15, 2025, and the 2025 wage base of $176,100 is in Table 3 of the same publication. The maximum dollar figures are that year's rate applied to that year's wage base.

Tax	2026	2025	Source
Social Security (OASDI), employee	6.2%	6.2%	IRS Pub. 15 (2026)
Social Security (OASDI), employer	6.2%	6.2%	IRS Pub. 15 (2026)
Social Security wage base	$184,500	$176,100	IRS Pub. 15 (2026), 2025 from its Table 3
Maximum Social Security tax, employee	$11,439.00	$10,918.20	6.2% of that year's wage base
Maximum Social Security tax, employer	$11,439.00	$10,918.20	6.2% of that year's wage base
Maximum combined, both sides	$22,878.00	$21,836.40	12.4% of that year's wage base
Medicare, each side	1.45%	1.45%	IRS Pub. 15 (2026)
Medicare wage base	None	None	IRS Pub. 15 (2026)
Additional Medicare, employee only (withholding threshold)	0.9% above $200,000	0.9% above $200,000	IRS Topic no. 751

 The 0.9% Additional Medicare Tax is withheld from the employee once their wages with you pass $200,000 in the year, without regard to filing status, and you do not match it, per IRS Topic no. 751. Hiring US employees from overseas? See how our Employer of Record (EOR) service handles FICA compliance so you don't have to set up a local entity.

II. How Do You Calculate the Total Employer Payroll Cost in the U.S.?

To budget effectively, you must look beyond the gross salary. In addition to FICA, employers pay Federal Unemployment Tax (FUTA). For 2026, the statutory rate is 6.0% on the first $7,000 you pay each employee, and a credit of up to 5.4% for state unemployment taxes paid in full and on time brings the effective rate down to 0.6%, per IRS Publication 15 (2026). That 0.6% holds only outside a credit reduction state, one that has not repaid money it borrowed from the federal government to pay unemployment benefits. Wages subject to such a state's unemployment tax earn a smaller credit, so more FUTA tax is due, per IRS Topic no. 759. State unemployment tax is charged separately and at your own experience rate, so it is not in the example below.

Federal employer cost on a $100,000 salary, 2026

• Social Security (6.2%, under the $184,500 wage base): $6,200
• Medicare (1.45%, no wage base): $1,450
• FUTA (0.6% effective outside a credit reduction state, on the first $7,000): $42
• Total federal employer payroll tax: $7,692
• State unemployment tax: extra, and set by your state and experience rate

Need help drafting compliant employment contracts? Talk to our experts to ensure your U.S. offers meet all federal and state requirements.

III. How the Wage Base Cap Works in Payroll

The wage base is a hard stop, applied per employer, per employee, per calendar year. Once the wages you have paid one person reach the base, Social Security tax stops on both sides for the rest of the year. Medicare keeps running, because it has no base.

Does the employer's half stop too?

Yes. The cap is not an employee-only relief. Your own 6.2% stops at exactly the same point their 6.2% does, so the most you can owe in Social Security tax for any one employee is $11,439.00 in 2026 and was $10,918.20 in 2025.

Worked example: an employee on $250,000 in 2026

• Social Security: you withhold 6.2% until their wages reach $184,500, then stop. That is $11,439.00 withheld and $11,439.00 paid by you.
• Medicare: 1.45% on the whole $250,000, so $3,625.00 withheld and $3,625.00 paid by you.
• Additional Medicare Tax: 0.9% on the $50,000 above $200,000, so $450.00 withheld. You do not match this one.

Two jobs, and why too much can be withheld

Each employer applies the wage base to the wages it pays, and employers do not coordinate. Someone earning $120,000 from you and $90,000 elsewhere has $210,000 of wages in 2026, above the $184,500 base, yet both employers will have withheld correctly. The employee claims the excess as a credit on their own income tax return. You do not refund it and you do not adjust your own share. Where a single employer has over-withheld, that employer should correct it, and if it does not, the employee can file Form 843, per IRS Topic no. 608.

Social Security wages are not gross pay

The base applies to Social Security wages, which can come out lower or higher than salary. Under a section 125 cafeteria plan, the benefit an employee picks is treated as if it had been provided outside the plan, so salary put toward health coverage through the plan is not Social Security wages, and cash taken instead of a benefit is. Bonuses, taxable fringe benefits, and 401(k) elective deferrals all count, the deferrals even though they are generally exempt from income tax withholding, per IRS Publication 15 (2026). Adoption assistance counts too, per IRS Publication 15-B (2026). Box 3 of Form W-2 reports Social Security wages with the cap already applied, so for anyone whose Social Security wages pass the base, box 3 stops at $184,500 for 2026.

For the pay dates and holiday rules that sit alongside these calculations, see our US public holiday payroll guide for 2026.

Employee vs. Contractor Classification

A common pitfall for global employers is misclassifying staff. If you hire a "contractor" but exert "employee-level" control over their hours and tools, the IRS may demand back taxes plus penalties, calculated as described in Section VI below.

IV. Global Compliance: Totalization & Regional Rules

For international firms, Totalization Agreements prevent double taxation for workers moving between countries. If your employee is covered by their home country's system, they may be exempt from U.S. FICA. Of the markets below, only the United Kingdom has an agreement with the United States, and each has its own worker classification rules:

• United Kingdom: strict off-payroll working (IR35) rules determine if a contractor is a “disguised employee.”
• Singapore: employers must navigate Central Provident Fund (CPF) contractor classification to avoid “Contract of Service” penalties. The US and Singapore do not have a totalization agreement in force.
• Philippines: direct employer contributions to the Social Security System (SSS) are mandatory under Republic Act No. 11199: coverage is compulsory for employees not over 60 (section 9), an employer's contributions for a covered employee end with the month of separation from employment, not at a set age (section 11), and a retired member reemployed before 65 is covered again (section 12-B).
• Malaysia: the Employees Provident Fund (EPF) has specific rules for “Contract for Service” vs. “Contract of Service.”

Different regions use different legal tests to determine if a worker is an employee or a contractor. Misunderstanding these can lead to substantial liabilities in Singapore, the UK, or the Philippines.

How totalization agreements work

Every US totalization agreement except the one with Italy includes a “detached-worker” rule: an employee sent temporarily to work for the same employer in an agreement country stays covered only by the country that sent them, generally for assignments expected to last five years or less, according to the Social Security Administration. Keeping home coverage beyond that needs an exception agreed by both countries' authorities, which is used infrequently and only in compelling cases. The exemption is documented with a certificate of coverage from the country that keeps covering the worker, and Section V below covers how that works in each direction.

As of September 2026, the United States has totalization agreements in force with 31 countries, according to the Social Security Administration's list: 24 in Europe, plus Australia, Brazil, Canada, Chile, Japan, South Korea, and Uruguay. Romania is the newest, in force since September 1, 2026. There is no agreement with Singapore, mainland China, India, any Southeast Asian country, or most of Latin America. Employers moving talent through these corridors cannot rely on a certificate of coverage, so check whether the host country charges contributions for a foreign assignee. Singapore's CPF does not.

Global Compliance: Worker Classification and Misclassification Risks

Operating across borders? We handle payroll tax in 150+ countries to ensure you stay ahead of 2026 regulations.

V. Social Security and Medicare When Your US Employees Work Overseas

The sections above cover employers paying people in the United States. Many employers face the opposite case: a US company with employees working abroad. Three mechanisms decide what you owe for Social Security and Medicare.

US citizens and residents working abroad for an American employer

Wages paid to US citizens and residents employed outside the United States are generally subject to Social Security and Medicare tax if the employer is an American employer, according to the IRS. Internal Revenue Code section 3121(h) defines an American employer to include a corporation organized under federal or state law, a US resident individual, and a partnership in which at least two-thirds of the partners are US residents. Moving a US employee overseas does not, on its own, take their wages out of FICA.

Totalization agreements and certificates of coverage

Where the United States has a totalization agreement with the host country, the agreement assigns coverage to one country and exempts the employer and employee from Social Security taxes in the other, as the Social Security Administration (SSA) explains. The worker must document that exemption with a certificate of coverage from the country that keeps covering them. For an employee you transfer temporarily from the United States to an agreement country, generally for five years or less under most agreements, you as the employer request the certificate from the SSA, which accepts employer requests online. An employee who moves for longer is generally covered by the host country instead. For an employee sent temporarily to the United States, the certificate comes from the home country's agency, and once the employee gives you the certificate, they are exempt from US Social Security and Medicare taxes, so you can stop withholding them on their earnings.

Where there is no agreement, both countries can require Social Security taxes on the same wages. The United States has no agreement with Singapore, Hong Kong, mainland China, India, or Vietnam, so check what the host country requires. What that costs varies: Singapore's CPF, for instance, is payable only for citizens and permanent residents, so a US national on assignment there usually attracts no CPF at all. Our employment guides for Singapore and Vietnam cover the local side.

Section 3121(l) agreements for foreign affiliates

If your US citizens or residents work for a foreign subsidiary rather than for the US company itself, US coverage does not continue automatically. An American employer can extend US Social Security coverage to them through a section 3121(l) agreement, made by filing IRS Form 2032. A foreign affiliate is any foreign entity in which the American employer has at least a 10% interest, directly or through one or more entities, counted in voting stock for a corporation and in profits for any other entity, according to the IRS. Once in effect, a section 3121(l) agreement cannot be terminated, so treat it as a lasting commitment.

For the host-country side of employing people abroad, our Employer of Record service and global payroll handle local contracts, contributions, and filings.

VI. Real Misclassification Case Studies

Using both full-time employees and independent contractors gives you flexibility, and it requires a clean line between how the two groups are managed.

In Uber BV v Aslam [2021] UKSC 5, decided on February 19, 2021, the UK Supreme Court unanimously held that Uber drivers were workers entitled to the minimum wage and paid leave, and that they were working whenever they were logged into the app in the territory where they were licensed to operate and ready to accept trips. The court also held that it is wrong in principle to treat the written agreements as the starting point in deciding whether someone is a worker, as its press summary sets out.

Red flags in a mixed team include providing a company email, requiring fixed “9-to-5” hours, or being the contractor's sole source of income.

How to structure mixed teams safely

• Differentiated tools: avoid giving contractors internal “employee” badges, @company.com email addresses (unless strictly necessary for security), or company-provided laptops.
• Outcome vs. hour tracking: pay contractors based on project milestones (deliverables), while employees are paid for their time and availability.
• Reporting lines: contractors should not manage employees, nor should they be subject to the same performance review process as regular staff.

When to convert a contractor to an employee

• Tenure: if a contractor has worked for you full-time with no end date, and one project keeps rolling into the next.
• Core function: if the role has moved from a “specialist project” to an “essential daily operation.”
• Dependency: if your company is the worker's sole source of income, making them economically dependent on you.

The IRS 1099 vs. W-2 trap: what Section 3509 really means

Labeling a US worker a “1099 independent contractor” solely to avoid the employer portion of Social Security and Medicare (FICA) taxes does not remove the liability. If the worker is in fact an employee, you owe your own share of those taxes in full, and section 3509 sets how much of the employee's taxes you owe, depending on how the misclassification happened.

• If the required Form 1099-NEC was filed, Internal Revenue Code section 3509(a) reduces what you owe on the employee's side: income tax withholding is figured as 1.5% of wages, and the employee's FICA is figured as 20% of what it would otherwise have been. Your own employer share is not reduced.
• If the required information returns were not filed, section 3509(b) doubles both of those figures, to 3% and 40%, unless the failure is due to reasonable cause and not willful neglect. Your own employer share is still not reduced.
• If the failure to withhold was due to intentional disregard, section 3509(c) switches the relief off completely. The reduced figures do not apply at all, and you are assessed the full amounts you should have withheld plus your own share, with interest and penalties on top, as the Internal Revenue Manual sets out.

Trying to navigate US payroll taxes as a foreign entity? Do not risk IRS misclassification penalties by defaulting to 1099 contracts for workers who function like employees. Use our Global Contractor service for genuine US freelancers, or upgrade to Contractor of Record (COR) for added liability protection in high-enforcement roles, and let our Employer of Record (EOR) service handle your W-2 employees. We calculate, withhold, and remit US Social Security and Medicare taxes on your behalf.

Need help managing hybrid teams? We support 900+ companies globally, helping you structure Contract for Service agreements that align with U.S. classification standards. Contact us today.

VII. How Slasify Protects Your Global Growth

Most of this page is about what you owe in the United States. The other half of the bill sits in the country where your people do the work, and that is the half we take on.

We employ your people through our own entities in Singapore, Hong Kong, Taiwan, Malaysia, Vietnam, and mainland China. Everywhere else, across 150+ countries, we become the legal employer through our network of 600+ local partners and entities. Either way, the local employment contract, the statutory contributions, and the local filings become our responsibility rather than yours.

We run payroll in 130+ currencies, so paying a team in Taipei and a team in Ho Chi Minh City does not mean standing up two separate payroll operations.

The US side stays yours. If your employee is a US citizen or resident working abroad for your US company, their wages generally stay inside FICA, and we do not change that. Section V above sets out the two things that do move the line: a certificate of coverage under a totalization agreement, and a section 3121(l) agreement for a foreign affiliate.

Three services cover the work. Employer of Record, from USD 250 per month, when you want us to be the legal employer. Global Contractor, from USD 50 per month, when the person is genuinely a contractor. Global Payroll, on quote, when you already have the entity and want the payroll run correctly.

Those rates are published, so you can price the option you need before you speak to anyone. See our pricing.

VIII. US Social Security Tax FAQs: 2026 and 2025

Q: What is the OASDI limit for 2026, and what is the maximum Social Security tax?

$184,500. That is the 2026 Social Security wage base, and OASDI is the formal name for Social Security tax. At 6.2%, the limit caps the tax at $11,439.00 for the employee and $11,439.00 for the employer, or $22,878.00 combined. For 2025, the prior year, the limit was $176,100 and the maximum was $10,918.20 on each side. Both years' figures are in IRS Publication 15 (2026), dated December 15, 2025.

Q: What was the maximum Social Security tax for 2025?

$10,918.20 for the employee and $10,918.20 for the employer, which is 6.2% of the $176,100 wage base that applied in 2025. Across both sides, that is $21,836.40 on one person's wages. The 2025 wage base is published in Table 3 of IRS Publication 15 (2026).

Q: What is the Social Security tax rate?

6.2% withheld from the employee and 6.2% paid by the employer, 12.4% in total. It is the same in 2026 as it was in 2025. Medicare is a separate tax at 1.45% each way, per IRS Topic no. 751.

Q: Does the employer portion of Social Security stop at the cap?

Yes. The wage base applies to both halves. Once an employee's wages with you reach the base for the year, you stop withholding their 6.2% and you stop paying your own 6.2% on that person. Medicare does not stop, because Medicare has no wage base.

Q: Do employers match Social Security and Medicare?

Yes for both, with one exception. You match the 6.2% Social Security and the 1.45% Medicare. You do not match the 0.9% Additional Medicare Tax, although you must still withhold it once an employee's wages with you pass $200,000 in the year, whatever their filing status.

Q: What is the FICA limit?

FICA is Social Security and Medicare together, and only the Social Security half has a limit. For 2026, it is $184,500, and for 2025, it was $176,100. Medicare applies to every dollar, so there is no FICA limit as such.

Q: Why are Social Security wages lower than gross pay?

For anyone whose Social Security wages pass the wage base, the reason is the cap itself: box 3 of Form W-2 stops at $184,500 for 2026, however much the employee earned, under the IRS instructions for Form W-2. Below the base, the gap comes from pay that is not Social Security wages, such as salary an employee puts toward health coverage through a section 125 cafeteria plan. Not every pre-tax deduction lowers box 3, though: elective deferrals to a 401(k) plan are Social Security wages, so box 3 can come out higher than box 1.

Q: An employee has two jobs and went over the maximum. Do I refund the excess?

No. Each employer applies the wage base to the wages it pays, so two employers can both withhold correctly and the employee can still go over the annual maximum. The employee claims the excess as a credit on their own income tax return. Where one employer over-withheld, that employer should adjust it, and if it does not, the employee can file Form 843, per IRS Topic no. 608.

Q: Can someone opt out of paying Social Security tax?

Not by agreement. A few narrow statutory exemptions exist, for example certain nonresident alien students and certain religious groups, but an employer and a worker cannot simply agree to skip FICA on work that is covered. Calling a US employee a contractor does not remove it either, which is what Section VI is about.

Q: Are self-employed people responsible for the full 12.4%?

Yes. Self-employment tax is 15.3%, made up of 12.4% for Social Security and 2.9% for Medicare, according to the IRS. The same annual wage base caps the Social Security part, and half of the tax is deductible on the federal income tax return. If you pay genuine US freelancers, our Global Contractor service handles the contracts and the payments, and our global contractor guide covers the rest.

Q: Does a US company pay Social Security tax on an employee working abroad?

Generally yes, if the employee is a US citizen or resident and the company is an American employer. The IRS treats those wages as subject to Social Security and Medicare tax unless a totalization agreement assigns coverage to the other country, in which case a certificate of coverage documents the exemption. Where there is no agreement, both countries can tax the same wages. Section V covers both cases in full.

Ready to Simplify Global Expansion with Slasify?

Navigating FICA tax employer requirements is complex, especially when managing teams in the US alongside the Philippines or Europe. We act as your Employer of Record (EOR), legally employing your US team so you don't have to deal with the IRS directly. We handle all withholdings, global payroll, match your contributions, and provide a unified dashboard for your global workforce. Book a Demo Today and let us handle your 2026 tax updates.