Social Security taxes on employee wages and self employment income is still 6.2% and 12.4% respectively. However, the IRS sets a limit on how much income is subject to this tax. In the 2007, the wage limit was $97,500, meaning income above this amount was not taxed for social security.

For 2008, the limit has been increased to $102,000. All income earned above and beyond the $102,000 will not be subject to social security tax. Medicare continues to be taxed on the entire amount of income, 1.45% for employee wages and 2.9% for self employment income.

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