Learn about federal and state payroll tax wage bases and limits and how it may affect your paychecks and tax payments.
Stay on top of your payroll wage bases and limits for federal or state taxes with QuickBooks payroll product.
In this article, we’ll help you understand 2022 and 2021 wage bases and limits and how to update them for:
- Social Security
- Medicare
- Federal Income Tax
- State Income Tax
- State Unemployment Insurance
Understand annual wage base limits
A wage base limit is a per-employee cap on the earnings that are taxable. Once an employee reaches the cap, taxes may stop or increase.
Note: Taxes will start calculating again if your state or the federal government changes the wage base limit. Also, if your employee has more than one job, wage base limits are per employee, per employer, per year.
How to update wage base limits
See wage bases and limits (for reference)
Federal Income Tax is based on the employee. See IRS Publication 15 (Circular E) for calculations.
Note: Employees and employers have separate wage base limits for Social Security and Medicare taxes.
2022
| Tax type |
Employer rate |
Employee rate |
Wage base limit |
| Social Security |
6.2% |
6.2% |
$147,000.00 |
| Medicare |
1.45% |
1.45% |
Varies |
| Additional Medicare |
1.45% |
2.35% |
Varies |
| FUTA |
0.6% |
N/A |
$7000.00 |
Check out SSA 2022 Fact Sheet for Social Security information.
Note: Employees are subject to additional medicare withholding of 0.9% for a total rate of 2.35% if they reach the wage base limit for their filing status. See the IRS FAQ for more information.
2021
| Tax type |
Employer rate |
Employee rate |
Wage base limit |
| Social Security |
6.2% |
6.2% |
$142,800.00 |
| Medicare |
1.45% |
1.45% |
Varies |
| Additional Medicare |
1.45% |
2.35% |
Varies |
| FUTA |
0.6% |
N/A |
$7000.00 |
Check out SSA 2021 Fact Sheet for Social Security information.
Note: Employees are subject to additional medicare withholding of 0.9% for a total rate of 2.35% if they reach the wage limit for their filing status. See the IRS FAQ for more information.
State wage bases and limits vary for State Income Tax and State Unemployment Insurance. For information about state taxes, visit your state tax agency's official website.
How to see your employee wage base limits
This report shows detailed information about how QuickBooks calculates tax amounts on employee paychecks and the wage base limit for each employee for each tax.
QuickBooks Online Payroll
- Go to Reports.
- Select Payroll Tax and Wage Summary.
- From the Date Range ▼ drop-down menu, select This Year.
- Select Run Report.
- Choose the tax type you want to see the wage base for.
QuickBooks Desktop Payroll
- Go to Reports.
- Select Employees & Payroll.
- Select Payroll Detail Review.
- From the Dates ▼ drop-down menu, select This Calendar Year.
- Select Refresh.
