Effective January 1, 2021, the U.S. Social Security Administration will increase the maximum earnings subject to the Social Security payroll tax by $5,100 (from $137,700 in 2020 to $142,800 in 2021).
| Tax | 2021 Employer Tax % | 2021 Employee Tax % | 2021 Maximum Earnings Cap | Increase over 2020 |
| Social Security | 6.20% | 6.20% | $142,800 | $5,100 Maximum Earnings Cap |
| Medicare | 1.45% | 1.45% | No Limit | — |
| FICA Rate | 7.65% | 7.65% | — |
Source: U.S. Social Security Administration
Note: Excludes reference to 0.9% employee-paid Medicare tax under a provision of the Affordable Care Act.
The Internal Revenue Service has announced 2021 IRA contribution limits as well. Learn more by taking a look at our recent blog post breaking down all of the major changes.
