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. Wage Push Inflation

    A general increase in the cost of goods that is preceded by and ...
  2. Living Wage

    A theoretical wage level that allows the earner to afford adequate ...
  3. Minimum Wage

    The minimum amount of compensation an employee must receive for ...
  4. Wage Expense

    In financial accounting, wage expense represents payments made ...
  5. Cash Wages

    Cash wages include any kind of compensation that comes in the ...
  6. Justified Wage

    A wage level for a job that is set by market dynamics and justified ...
Related Articles
  1. Markets

    Why Wages Stick When The Economy Shifts

    Even economists can't agree on the impact (or even existence) of wage stickiness. So, how does it affect you?
  2. Personal Finance

    Small Business Tax Obligations: Payroll Taxes

    Don't leave it up to your accountant - owners are ultimately responsible for fulfilling tax obligations.
  3. Markets

    Why $15 Minimum Wage Might Not Be Good News for Anyone (MCD, DPZ)

    Discover why the minimum wage isn't the panacea it is made out to be, and how artificial wage increases strain businesses and consumers.
  4. Markets

    These Retailers Are Least Impacted by Wage Increases (WMT, TGT)

    Learn how certain retailers, such as those that have already built wage increases into their business models, face less pressure from rising wages.
  5. Markets

    Will You See Higher Wages In 2015?

    It's been a few years into the economic recovery from the Great Recession, and the employment picture has been rocky.
  6. Insights

    Wal-Mart's Wage Increase Has Potential Drawbacks for Workers (WMT)

    Wal-Mart workers were overjoyed to hear that they would receive $10 an hour. However, there are significant non-financial drawbacks to this raise.
  7. Retirement

    Can A Family Survive On The U.S. Minimum Wage? (WMT, COST)

    As the political debate roars on, the numbers are clear: Even two full-timers at U.S. minimum wage can't keep a family of four above the poverty line.
  8. Markets

    Minimum Wages Can Raise Unemployment

    Learn why many economists feel that minimum wages, while intended to benefit low-wage workers, actually hurt them by increasing unemployment.
  9. Personal Finance

    The Minimum Wage: Does It Matter?

    The numbers show that a fight for a living wage is more important than a fight for a raise in minimum wage.
  10. Markets

    Why Walmart Raised Its Minimum Wage

    Read about the potential pros and cons of Walmart's promise to increase its minimum starting salary to $10 an hour.
RELATED FAQS
  1. Will a 10-99 form make my taxes higher?

    My employer is not withholding taxes each pay day. Will this increase my taxes because they will give ... Read Answer >>
  2. How much of my income goes to Social Security taxes?

    Discover how much of your income goes to social security tax: what the rate is, what the limits are and what types of income ... Read Answer >>
  3. Why is there a cap on the Federal Insurance Contribution (FICA) tax?

    Find out the history behind the the controversial FICA cap on wages. Read Answer >>
  4. What are the Social Security tax caps?

    Learn how the Social Security tax cap works, what percentage of income is deducted for Social Security taxes and the history ... Read Answer >>
  5. What is the Social Security tax rate?

    Learn what the Social Security tax rate is, how it has evolved over the years, what is future may hold and a common complaint ... Read Answer >>
  6. Does raising the minimum wage increase inflation?

    Explore whether raising the minimum wage increases inflation. This is a polarizing topic that is inherently linked to unemployment. Read Answer >>
Hot Definitions
  1. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  2. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  3. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  4. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  5. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  6. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
Trading Center