The Social Security Administration announced that there would be no increase in the amount of wages subject to Social Security taxes (old age, survivor, and disability insurance) for 2016. There is no limit on the amount of wages subject to the Medicare tax. Because the consumer price index did not increase from the third quarter of 2014 to the third quarter of 2015, there will be no cost-of-living adjustment (COLA) in the amount of Social Security benefits paid next year. When there is no COLA in Social Security benefits, an increase in the amount of wages subject to Social Security taxes is prohibited by law. So the current $118,500 maximum amount of earnings subject to Social Security taxes will also apply in 2016. Among the other unchanged limits is the amount a worker under full retirement age can earn before he or she has Social Security benefits reduced. The limit remains at $15,720 a year, after which $1 in benefits is withheld for every $2 earned above the limit.
2016 Social Security Fact Sheet
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Tax Rate:
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2015 | 2016 |
|---|---|---|
| Employee | 7.65% | 7.65% |
| Self-Employed | 15.30% | 15.30% |
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NOTE: The 7.65% tax rate is the combined rate for Social Security and Medicare. The Social Security portion (OASDI) is 6.20% on earnings up to the applicable taxable maximum amount (see below). The Medicare portion (HI) is 1.45% on all earnings. Also, as of January 2013, individuals with earned income of more than $200,000 ($250,000 for married couples filing jointly) pay an additional 0.9 percent in Medicare taxes. The tax rates shown above do not include the 0.9 percent.
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Maximum Taxable Earnings:
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2015 | 2016 |
| Social Security (OASDI only) | $118,500 | $118,500* |
| Medicare (HI only) | N o L i m i t | |
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Quarter of Coverage:
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2015 | 2016 |
| $1,220 | $1,260 | |
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Retirement Earnings Test Exempt Amounts:
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2015 | 2016 |
| Under full retirement age
NOTE: One dollar in benefits will be withheld for every $2 in earnings above the limit. |
$15,720/yr. ($1,310/mo.) |
$15,720/yr.* ($1,310/mo.) |
| The year an individual reaches full retirement age
NOTE: Applies only to earnings for months prior to attaining full retirement age. One dollar in benefits will be withheld for every $3 in earnings above the limit. There is no limit on earnings beginning the month an individual attains full retirement age. |
$41,880/yr. ($3,490/mo.) |
$41,880/yr.* ($3,490/mo.) |
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Social Security Disability Thresholds:
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2015 | 2016 |
| Substantial Gainful Activity (SGA) Non-Blind Blind |
$1,090/mo. $1,820/mo. |
$1,130/mo. $1,820/mo.* |
| Trial Work Period (TWP) | $780/mo. | $ 810/mo. |
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Maximum Social Security Benefit:
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2015 | 2016 |
| Worker Retiring at Full Retirement Age | $2,663/mo. | $2,639/mo.** |
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SSI Federal Payment Standard:
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2015 | 2016 |
| Individual | $733/mo. | $ 733/mo.* |
| Couple | $1,100/mo. | $1,100/mo.* |
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SSI Resources Limits:
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2015 | 2016 |
| Individual | $2,000 | $2,000 |
| Couple | $3,000 | $3,000 |
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SSI Student Exclusion:
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2015 | 2016 |
| Monthly limit | $1,780 | $1,780* |
| Annual limit | $7,180 | $7,180* |
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Estimated Average Monthly Social Security Benefits Payable in January 2016:
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| All Retired Workers | $1,341 | |
| Aged Couple, Both Receiving Benefits | $2,212 | |
| Widowed Mother and Two Children | $2,680 | |
| Aged Widow(er) Alone | $1,285 | |
| Disabled Worker, Spouse and One or More Children | $1,983 | |
| All Disabled Workers | $1,166 | |
| * Because there is no COLA, by law these amounts remain unchanged in 2016.
** A decrease in full maximum benefits occurs when there is no COLA, but there is an increase in the national average wage index. |
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SSA – January 2016 – https://www.ssa.gov/news/press/factsheets/colafacts2016.html
