In 2023, Social Security taxes might be due on an additional $8,100 of your earnings.

The expected cost-of-living adjustment (COLA) for 2023 has drawn the attention of Social Security claimants since it is anticipated to be the highest increase in payments in more than 40 years 

However, another Social Security reform will take effect in 2023 that will affect all employees, even those in their 20s and those who may be receiving benefits but are still employed.

I'm talking about the wage base, which establishes the percentage of an employee's pay that is liable to Social Security taxes. The salary basis will alter significantly in 2023.

The amount of salary that persons are required to pay Social Security taxes on is capped each year by the Social Security Administration (SSA). 

The pay base will be $147,000 in 2022. The Social Security tax rate is either 12.4% if you work for yourself or 6.2% if you are an employer.

This implies that you would not be required to pay Social Security taxes on $53,000 of a $200,000 yearly wage if you had one this year.

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