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The Empuls Glossary

Glossary of Human Resources Management and Employee Benefit Terms

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Social Security Wages

Social security wages are the income earned by an individual governed by social security tax which includes salary, wages, tips, and bonuses under social security wages. The social security wage has a maximum taxable income limit of $160,200 for 2023, known as the social security wage base.

What is social security wage?

Social security wage is also known as covered wages, the earnings on which employees pay Social security taxes. These wages are withheld from the payroll tax from the employee’s pay-check to fund the social security program.

Social security wage includes various forms of compensation and income earned through employment or self-employment.

The amount of Social Security tax withheld is forecasted by the current social security tax rate, a fixed percentage of an employee’s social security wage.

There is a maximum limit on social security wages; once the employee reaches the base limit, there is no more charge for the year. Furthermore, the limit gets adjusted and is subject to change.

Listen, recognize, award, and retain your employees with our Employee engagement software  

Are tips included in social security wages?

Yes, tips are included in social security wages. Tips are covered under income and subjected to social security wages.

Tips that count as social security wages are:

  • Cash tips or electronic tips (credit/debit card payments) from the customers
  • Tip sharing (servers, bartenders sharing their tips)
  • Tips received through a mandatory service charge

What is the social security wage base?

The social security wage base is also referred to as the Social Security taxable wage base or the social security earning limit, which is the maximum amount of earnings on which social security taxes are assessed in a particular year. That is considered as the threshold above. No add-on social security taxes are withheld.

How to calculate social security wages?

To calculate the employee’s social security wages,

Consider the gross pay amount and subtract any exclusions, such as food expenses, in a meeting.

For instance,

An employee earns $50,000 in wages and $2000 in tips, considering the current social base of $160,200.

Now calculating the Social Security wages:

Total Earning= Wages + Tips

                       $50,000 + $2000 = $52,000

Since $52,000 is below the Social Security wage base, the whole amount would be considered Social Security wages.

Note: If the amount were above the social security wage base, the percentage would be deducted and withheld with the Social Security Tax.

It is necessary to note that calculating social security wages may include add-on factors depending on different circumstances, for example, self-employment income or special tax provisions.

What is excluded from social security wages?

The earnings that may exclude from social security wages are as follows:

  • Employee contribution toward retirement
  • Discounts provided to employees (for goods and services offered)
  • Reimbursement (travel expenses)
  • Tips ( if the sum is less than $20/month)
  • Employer-paid health or accident insurance premiums
  • Employer health saving account (HSA) contributions

Are social security wages the same as gross income?

No, social security wages and gross income are not the same, the amount of social security wage and gross income are sometimes identical, but the concepts are different.

Social security wages mainly refer to the chunk of an employee’s earnings that are withheld to social security tax, which is determined by the amount from the employee’s pay- check. In contrast, gross income is the total amount of income received or earned by an employee before any withholdings.

Gross income is a larger concept that incorporates all income or revenue types. On the other hand, social security wages are particularly concerned with social security tax.

Employee pulse surveys:

These are short surveys that can be sent frequently to check what your employees think about an issue quickly. The survey comprises fewer questions (not more than 10) to get the information quickly. These can be administered at regular intervals (monthly/weekly/quarterly).

One-on-one meetings:

Having periodic, hour-long meetings for an informal chat with every team member is an excellent way to get a true sense of what’s happening with them. Since it is a safe and private conversation, it helps you get better details about an issue.


eNPS (employee Net Promoter score) is one of the simplest yet effective ways to assess your employee's opinion of your company. It includes one intriguing question that gauges loyalty. An example of eNPS questions include: How likely are you to recommend our company to others? Employees respond to the eNPS survey on a scale of 1-10, where 10 denotes they are ‘highly likely’ to recommend the company and 1 signifies they are ‘highly unlikely’ to recommend it.

Based on the responses, employees can be placed in three different categories:

  • Promoters
    Employees who have responded positively or agreed.
  • Detractors
    Employees who have reacted negatively or disagreed.
  • Passives
    Employees who have stayed neutral with their responses.

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