2024 Social Security, CA SDI Taxable Wage Base, Withholding Rates
Employers should know about two new taxable wage base updates for 2024. The Social Security Administration (SSA) recently announced that, for 2024, the maximum amount of earnings subject to the Social Security tax — also known as the Social Security taxable wage base — will increase to $168,600 from $160,200 (a 5.2 percent increase).
Some things will stay the same though in 2024; the Social Security withholding rate is unchanged, remaining at 6.2 percent, up to the maximum taxable amount. Similarly, the Federal Insurance Contributions Act (FICA) tax rate — which is the combined total of the Social Security tax rate and the 1.45 percent Medicare tax rate — remains unchanged at 7.65 percent.
Additionally, individuals with earned income of more than $200,000 ($250,000 for married couples filing jointly) pay an additional 0.9 percent in Medicare taxes. The tax rates above do not include the 0.9 percent. There is no limit on the amount of wages subject to the Medicare tax.
In California, a law signed in 2022 takes effect on January 1, 2024, which eliminates the taxable wage limit on employee wages subject to California’s State Disability Insurance (SDI) withholding rate. California’s SDI program pays for the state’s paid family leave (PFL) and disability insurance.
In 2023, the maximum taxable wage base for SDI was $153,164 and the SDI tax rate was 0.9 percent. For 2024, the SDI withholding rate increases to 1.1 percent with no taxable wage limit and maximum withholding for each employee subject to SDI contributions.
Mike McCluskey, Senior Technical Editor, CalChamber
The Social Security taxable wage base isn’t the only thing changing for 2024. Your required California Employment Notices have mandatory updates for January 1, 2024 — pre-order now! (Preferred Members and above save 20 percent).
HRCalifornia members can read more about Standard Deductions: Taxes in the HR Library. Not a member? Learn more about how HRCalifornia can help you.