The Social Security Administration announces a 3.6% benefit increase and updated payroll tax limits for 2027.
The Social Security Administration (SSA) has announced a 3.6% cost-of-living adjustment (COLA) for 2027, increasing benefits for nearly 72 million Social Security recipients beginning in January 2027. The adjustment will increase average monthly retirement benefits by approximately $75.
Approximately 7.3 million Supplemental Security Income (SSI) recipients will also see increased payments beginning December 31, 2026.
Important dates for Social Security recipients
Social Security beneficiaries can access their personalized 2027 COLA notices online beginning in late November through their my Social Security account. Individuals must enroll in paperless delivery by November 18, 2026, to receive their notices electronically. Otherwise, notices will be mailed in December.
Information about 2027 Medicare premiums will also be available in late November.
2027 Social Security wage base increases
In addition to the benefit increase, the Social Security taxable wage base will increase by $7,800, or 4.23%, in 2027. The following chart highlights the changes from 2026:
| 2026 | 2027 | |
|---|---|---|
| Maximum Social Security tax (employee and employer, each) | $11,439 | $11,922.60 |
| Social Security taxable wage base | $184,500 | $192,300 |
The Social Security tax rate will remain at 6.2% for both employees and employers, while the Medicare tax rate will remain at 1.45% for each, with no wage limit. Additionally, individuals with earned income exceeding $200,000 ($250,000 for married taxpayers filing jointly and $125,000 for married taxpayers filing separately) are subject to an additional 0.9% Medicare tax.
Employers should ensure their payroll systems reflect the updated Social Security taxable wage base beginning January 1, 2027.
Preparing for the 2027 changes
Employers should review the updated Social Security wage base, consider how the changes may affect payroll obligations in the coming year, and communicate the changes to employees who may be affected by the increased wage base.
Keiter’s Tax Professionals can help businesses and individuals navigate annual tax changes and plan accordingly. Contact your Keiter Opportunity Advisor | Email | Call 804.477.0000 to learn more.
Sources: Social Security Administration
About the Author
Erica Porter, CPA, CFP®, Tax Senior Manager
Erica specializes in estate, trust, gift, and individual income tax planning and compliance for high-net-worth individuals and families. With more than 20 years of public accounting experience, she works closely with clients and their advisors to develop thoughtful tax strategies that align with their financial goals and long-term legacy planning needs.
The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.
