Taxable Wage Base

DEFINITION of 'Taxable Wage Base'

Also known as the Social Security Wage Base, this base is the maximum amount of earned income upon which employees must pay Social Security taxes. Generally, the employee's gross wages will be equal to the taxable wage base. And typically an employee's employer will handle this calculation and withold the correct amount of taxes from each paycheck, but the employee is still responsible for reporting the tax.

BREAKING DOWN 'Taxable Wage Base'

In some instances, an employee will earn wages that can be classified as excess wages. These excess wages can be subtracted from gross income and so taxable wage base will be lower than gross income.

RELATED TERMS
  1. Income Tax

    A tax that governments impose on financial income generated by ...
  2. Social Security

    A United States federal program of social insurance and benefits ...
  3. Living Wage

    A theoretical wage level that allows the earner to afford adequate ...
  4. Self-Employment Tax

    Money that a small business owner must pay to the federal government ...
  5. Federal Income Tax

    A tax levied by the United States Internal Revenue Service (IRS) ...
  6. Federal Budget

    The federal budget is an itemized plan for the annual public ...
Related Articles
  1. Taxes

    Avoid the Social Security Tax Trap

    Government benefits can cost you big money! Know the income thresholds before you file.
  2. Retirement

    Introduction to Social Security

    You've probably contributed to this fund, but will you reap the benefits? Find out here.
  3. Retirement

    How Much Social Security Will You Get?

    You've been paying in for years - now it's time to find out what the system owes you.
  4. Retirement

    Maximize Your Social Security Benefits

    The plan's cost of living adjustments can provide protection against inflation.
  5. Options & Futures

    Choosing The Best Disability Insurance

    Social Security benefits can be hard to collect. Find out why you need disability insurance to protect your income, and learn how to choose the right policy for you.
  6. Retirement

    Top 6 Myths About Social Security Benefits

    Misinformation on retirement benefits is common. We'll set the record straight.
  7. Retirement

    The Gay Couple's Guide to Social Security Benefits

    The recent U.S. Supreme Court decision on marriage equality affords same-sex couples access to Social Security benefits. Here's how it works.
  8. Personal Finance

    10 Ways to Protect Your Social Security Number

    Identify theft thrives in part because people must give their Social Security number for so many types of interactions. How can you protect yourself?
  9. Retirement

    Early Out: A Realistic Plan to Retire Younger

    If you want to retire ahead of schedule, it'll take some extra planning.
  10. Saving and Spending

    Social Security: Navigating it with Your Clients

    Many people don’t realize how confusing Social Security can be until they're face to face with taking it. Here's how to talk to clients about it.
RELATED FAQS
  1. Am I losing the right to collect spousal Social Security benefits before I collect ...

    The short answer is yes, if you haven't reached age 62 by December 31, 2015. The Bipartisan Budget Act of 2015 disrupted ... Read Full Answer >>
  2. What is the maximum I can receive from my Social Security retirement benefit?

    The maximum monthly Social Security benefit payment for a person retiring in 2016 at full retirement age is $2,639. However, ... Read Full Answer >>
  3. What's the difference between Social Security Disability Insurance (SSDI) and Supplemental ...

    Disabled persons can receive payments through two programs: Social Security Disability Insurance and Supplemental Security ... Read Full Answer >>
  4. How does my spousal Social Security benefit work?

    If you have never worked or paid Social Security taxes, you will not be eligible to receive Social Security retirement benefits ... Read Full Answer >>
  5. Do tax brackets include Social Security?

    A portion of your Social Security benefits may be subject to federal taxation using tax brackets. Your tax bracket is determined ... Read Full Answer >>
  6. Are Cafeteria plans subject to FICA, ERISA or FUTA?

    Cafeteria plans are employer-sponsored benefit plans that provide both taxable and nontaxable, or qualified, benefit options ... Read Full Answer >>
Hot Definitions
  1. Liquidation Margin

    Liquidation margin refers to the value of all of the equity positions in a margin account. If an investor or trader holds ...
  2. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  3. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  4. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  5. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
Trading Center