Social Security Taxes and Wage Limits

There is a limit on the amount of wages that are taxed for Social Security, but there is no limit on wages that are taxed for Medicare.

Social Security Taxes
Your employer must withhold 6.2% of your income for old age, survivor, and disability insurance (OASDI), up to a maximum income of $102,000 for 2008 ($97,500 for 2007). Maximum income is defined as gross earnings less flexible spending and employee medical plan payroll deductions. The income ceiling generally rises each year.

Medicare Taxes
For hospital insurance under Medicare, your employer must withhold 1.45% of gross earnings less flexible spending and employer medical plan payroll deductions, without any income limit.