I’m terrible at math. Really, really bad at it. Like the Justin Timberlake character in the movie Friends with Benefits bad. So, for most of my career here at the NASPP, posting the alert about the yearly change to the maximum wages subject to Social Security has been a challenge, because it requires me to multiply the maximum wages by 6.2% to figure out the maximum withholding. Easy enough for most people, but in a lot of years I get it wrong.
So I’ve implemented some controls. Always copy the maximum wage base from the SSA press release; never type it. Instead of using a calculator (not as reliable as you might think, due to human error typing in the numbers or transcribing them), always do the math in Excel and always copy the result from Excel to the alert. And have someone else check my work, even though that person usually thinks I’m nuts for needing help with this. And then I check it a bunch more times myself (because it turns out that a lot of people are bad at math).
But this year, dammit, I got it right. I wrote a blog about it and posted the alert and no one emailed to tell me I had it wrong.
And then…
The SSA announced that they were changing the maximum. Yep, on November 27, the SSA issued a press release announcing that the maximum wage base for 2018 that they had originally reported ($128,700) is wrong and that the correct wage base for 2018 is $128,400. So the maximum Social Security withholding for 2018 is $7,960.80 (pretty sure, but feel free to check my math).
The SSA says the reason for the change is updated wage data:
This lower taxable maximum amount is due to corrected W2s provided to Social Security in late October 2017 by a national payroll service provider. Approximately 500,000 corrections for W2s from 2016 resulted in changes for three items based on the national average wage: the 2018 taxable maximum, primary insurance amount bend points–figures used in the computation of Social Security benefits–and family maximum bend points. No other items based on national average wages were affected.
But, I don’t know. Sure, it’s a believable story, but I think maybe the SSA is just as bad at math as I am. Just kidding. I really have no reason to doubt their explanation, although I am a little surprised that just half a million corrections can move the wage base by $300. With over 123 million employees in the United States in 2016 (and that doesn’t even count part-timers), that must have been quite an error.
– Barbara
