This article is for admins and employees who want to understand how wage base limits affect payroll taxes.
A taxable wage base limit is the amount of wages that taxes apply to in a given time period. Once an employee reaches the wage base limit for a tax, the employee or employer no longer owes that specific tax for the rest of the year.
Note: Wage bases reset each time an employee starts with a new employer.
These common payroll taxes have annual wage base limits per employee:
Social Security: $184,500 (for 2026)
For 2025: $176,100
For 2024: $168,600
Federal Unemployment Tax Act (FUTA): $7,000
State unemployment insurance (SUI): Varies depending on the state
Note: Employees who move to a new state are affected by wage bases and SUI taxes. Learn more in this article.
We’ll stop applying a tax for an employee on payroll once the year-to-date wages reach the wage base limit. At the start of the next year, we’ll reset the year-to-date amount so the tax applies again until the employee reaches the annual wage base limit.
Visit our article about FICA taxes (Social Security and Medicare) to view FICA rates and an example of how to calculate FICA and unemployment taxes.