The maximum amount of wages subject to Social Security taxes (OASDI) for 2019 increased to $132,900 from $128,400 in 2018. The employer’s maximum share also increased to $8,239.80 (6.2%) from $7,960.80 (6.2%) in 2018. As a result of the maximum wage limitation, the employer will not withhold Social Security wages once an employee exceeds the wage limit. The maximum amount on any W-2 in box 3 should be $8,239.80. On the other hand, there is no limit to wages subject to Medicare tax (1.45%).
Self-employed individuals are subject to Social Security and Medicare tax, also known as self-employment tax. The self-employment tax is based on 92.35% of the taxpayer’s net profit, not to exceed $132,900. The taxpayer can deduct ½ of his self-employment tax as an adjustment to income on Schedule 1 (Form 1040), line 27