The amount of Social Security tax owed by both employees and employers is based on the amount of "wages"rnpaid to employees. However, not all wages are subject to Social Security tax. There is an upper limit on thernamount of an individual's wages that is subject to Social Security taxes, commonly referred to as the taxablernwage base. An automatic escalator in the law increases this upper limit annually, and this figure is generallyrnannounced in the October of the year prior to the year it is to take effect.
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