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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/or 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: $142,800 in 2021
  • Federal unemployment tax act (FUTA): $7,000 in 2021
  • 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.


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