Taxable Wage Base Limits

A taxable wage base limit is the maximum amount of an employee’s earnings that are subject to certain payroll taxes each year. Once a worker’s year-to-date wages reach this limit for a specific tax, neither the employee nor the employer pays that tax again until the next calendar year.

For example, in 2025:

• Social Security tax stops once an employee earns $176,100.

• Federal unemployment tax (FUTA) stops after $7,000 in wages.

• State unemployment insurance (SUI) limits vary by state.

When an employee reaches the wage base limit, the system automatically stops deducting that tax from their paycheck. At the start of a new year, the count resets and tax withholding resumes.

If an employee changes jobs, the wage base starts over with the new employer — even if they already reached the limit with a previous one.

If an employee moves to a different state, SUI taxes depend on that state’s rules:

• If the new state’s wage base is lower, you won’t owe additional SUI tax in that state.

• If the new state’s wage base is higher, you’ll continue paying SUI taxes until reaching that state’s limit.

• Most states (except Minnesota and Louisiana) allow employers to consider wages already paid in another state to avoid double-taxing the same income.