Almost everyone has heard that the Social Security Administration announced an 8.7% increase in Social Security benefits for 2023. While it’s true that the cost of living adjustment will benefit more than 65 million Social Security beneficiaries, what has been seriously under-reported is the change in the Social Security “wage base.”
In 2022, the wage base was $147,000. Because of inflation, it will increase, and in 2023, the wage base will be $160,200. The increase in the wage base affects the required withholding by employers, and effects the amount of self-employment taxes payable. All of the above was in the Social Security Administration press release on October 13, 2022. If you want a copy of the press release, you can find it on the front page (for the time being) of the Social Security administration webpage at ssa.gov. On the left side of that front page, the very large “tile” among the pictures is titled “Cost-of-Living Adjustment (COLA) 2023.”The direct link to the notice can be found here.