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Give and Take at the SSA

Please note: This item is from our archives and was published in 2007. It is provided for historical reference. The content may be out of date and links may no longer function.

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Starting in January 2008, the maximum earnings subject to Social Security tax will rise 4.6%, from $97,500 to $102,000, marking the first time the taxable maximum exceeds $100,000. The Social Security Administration expects nearly 12 million workers will pay higher taxes as a result. The $4,500 increase in maximum taxable earnings surpasses the $3,300 increase from 2006 to 2007.

On a salary of $102,000 or more, the Social Security tax in 2008 will be $6,324, up $279 from 2007’s maximum of $6,045. The tax rate of 6.2%, established in 1990, will not change.

The SSA also announced a 2.3% cost-of-living adjustment on benefits payments in 2008 based on the Bureau of Labor Statistics’ Consumer Price Index for Urban Wage Earners and Clerical Workers .

Source: Social Security Administration, www.ssa.gov.