Certified Payroll Professional Practice Exam 2026 - Free CPP Practice Questions and Study Guide

The Social Security Wage Base for withholding is the maximum amount of an employee's earnings that are subject to Social Security taxes within a given calendar year. As of 2023, this wage base is $160,200, which means any earnings above this threshold are not subject to Social Security tax withholding.

While $117,000 was accurate for a previous tax year (2014), it is outdated. The correct figure ensures that only earnings up to a certain limit are taxed accordingly. Therefore, the answer provided does not reflect the current limit but rather an older threshold. Understanding the correct current wage base is important for payroll professionals to accurately calculate deductions for employees' Social Security contributions and ensure compliance with federal tax regulations.

For the most accurate assessment, staying updated with the IRS announcements concerning wage bases and tax regulations is crucial.