Wage Base

A wage base is the most wages per employee per year that a tax applies to. Once an employee's pay for the year passes it, that tax stops until January.

The Social Security wage base is set each year and usually rises with average wages, which is why high earners see Social Security tax disappear late in the year. The FUTA wage base is fixed by law at $7,000. Medicare has no wage base at all.

Each state sets its own SUTA wage base, and many raise it every year. Because FUTA and SUTA stop early, an employer's tax cost per worker is highest in the first months of the year. The payroll calculator shows the paycheck where each one runs out.