2008 Social Security and Medicare Tax Withholding

For 2008, the maximum limit on earnings for withholding in the Old-Age, Survivors, and Disability (OASDI) portion of the Social Security tax increases from $97,500.00 to $102,000.00. This is a $4,500 increase from the 2007 limit. The Social Security tax rate remains at 6.2 percent, result­ing in a maximum Social Security tax of $6,324.00. This is a $279.00 increase from the 2007 limit of $6,045.00. There is still no limit on the amount of earnings subject to the Medicare portion of the tax rate. The Medicare tax rate applies to all taxable wages, and remains at 1.45 percent. The Federal Insurance Contribution Act (FICA) tax rate, which is the combined Social Security tax rate of 6.2 per­cent and the Medicare tax rate of 1.45 percent, remains at 7.65 percent for 2007.

The information in the following table is effective January 1, 2008.

— Payroll, Finance, 10-25-07