Wage base limits

A taxable wage base limit is the amount of wages that are subject to taxes in a given time period. Once an employee has hit the wage base limit for a tax, the employee and employer are no longer responsible for paying that specific tax in the current year. These common payroll taxes have annual wage base limits per employee:

  • Social Security: $128,400 in 2018
  • Federal unemployment tax act (FUTA): $7,000 for 2018
  • State unemployment insurance (SUI): Varies depending on the state

We'll stop applying a tax for an employee in payroll once the year-to-date wages hit the wage base limit. At the start of the next year, we'll reset the year-to-date amount so that the tax is applied again until the annual wage base limit is met.

For more information on State SUI rates and wage bases check out our state registration articles.


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