The maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $142,800 from $137,700.

The OASDI (old age, survivors, and disability insurance) tax rate is 6.2%, so an employee with wages up to or above the maximum in 2021 will pay $8,853.60 in tax, with the employer paying an equal amount. Self-employed Individuals pay tax at a 12.4% rate up to the limit, for a $17,707.20 maximum amount of OASDI tax.

The Medicare hospital insurance tax of 1.45% each for employees and employers, or 2.9% for the self-employed, continues to have no wage limit.

The Social Security Administration also announced a cost of living increase of 1.3% for 2021.