The Social Security Administration has announced important updates for 2026 that affect both workers and retirees. These changes include a higher wage base for Social Security taxes, adjustments to benefit limits, and a cost‑of‑living increase.
Key Highlights for 2026:
- Social Security Wage Base: Increases to $184,500 (up from $176,100 in 2025).
- OASDI Tax Impact: Employees and employers each pay up to $11,439 (an increase of $521).
- Medicare Tax: Remains at 1.45% for employees and employers, with no wage limit.
- Additional Medicare Tax: Still applies at 0.9% for high earners ($200,000+ individuals, $250,000 joint filers).
- Self-Employment Tax: Continues at 12.4% up to the wage base, plus 2.9% Medicare tax on all net income.
- COLA Adjustment: Benefits increase by 2.8% starting January 2026.
- Earnings Limits:
Retirees at full retirement age: $65,160 before reductions apply.
Younger beneficiaries: $24,480 before reductions apply. - Maximum Monthly Benefit: Rises to $4,152 at full retirement age (up from $4,018 in 2025).
What This Means for You
These updates increase the maximum taxable earnings for workers, adjust benefit limits for retirees, and provide a modest cost‑of‑living increase. Understanding these changes can help workers, retirees, and employers plan for 2026.
Source: Journal of Accountancy, October 24, 2025, by Kevin Brewer
This summary is for informational purposes only and does not constitute legal or tax advice. For authoritative guidance, consult SSA.gov or a licensed tax professional.