Social Security’s quiet update could reduce some workers’ take-home pay by $967 a year

The Social Security Administration is moving ahead with a program adjustment that could leave some workers paying up to $967 more each year.

Alongside a recently announced 3.6% cost-of-living adjustment, the agency also disclosed another change that affects beneficiaries.

The SSA has raised the Maximum Taxable Earnings Limit, which is the top amount of a worker’s earnings that is subject to Social Security tax.

Also called the Contribution Base, that limit will increase from $184,500 to $192,300 in 2027.

That represents an additional $7,800 in taxable wages.

As a result, income up to $192,300 will be subject to the 6.2% Social Security payroll tax, which helps finance the program.

For a standard employee earning $192,300 or more, the higher cap will mean an extra $483.60 taken from pay over the year.

Employers will match that amount with an equal 6.2% contribution.

Self-employed workers, however, must cover both the employee and employer portions of the Social Security payroll tax.

That brings the total rate to 12.4%.

Because an additional $7,800 of earnings will now be taxed, self-employed people will owe about $967.20 more each year in Social Security taxes.

While higher earners will see more withheld from their paychecks in 2027, current beneficiaries will receive larger monthly Social Security payments next year.

All Social Security recipients will get a 3.6% increase in their monthly benefit through the annual COLA, or cost-of-living adjustment.

The benefit increase will begin in January, and it marks the biggest adjustment in four years.

The 3.6% rise will lift the average retired worker’s Social Security check by about $75 a month.

That adds up to roughly $900 over the course of a year.