OFFICE OF BUDGET, PAYROLL AND FISCAL ANALYSIS

The Social Security tax rate is 6.2% of all taxable wage up to the social security wage base limit for that tax year. Below are the wage base limits for the last five tax years. 

• 2025 - $176,100
• 2024 - $168,600
• 2023 - $160,200
• 2022 - $147,000
• 2021 - $142,800

When your YTD taxable wages reach the wage base limit for a tax year, wages above the limit are not taxed for Social Security.

Students employed by the A&M System (part-time employment) who are enrolled at least half-time, as defined under the Department of Education regulations, may qualify for exception to paying Social Security Tax. See Student Exception - FICA Tax section below for more information. 

The Medicare tax rate is 1.45% of all taxable earnings.

In addition, any taxable earnings over $200,000 are taxed additionally at 0.9% bringing the total tax rate for all wages over $200,000 to 2.35%.

Students employed by the A&M System (part-time employment) who are enrolled at least half-time, as defined under the Department of Education regulations, may qualify for exception to paying Social Security Tax. See Student Exception - FICA Tax section below for more information. 

Federal Withholding tax rates are based on the IRS tax tables and the tax amount is determined by the information submitted by the employee on their Form W-4. 

The IRS tax tables are adjusted each year and may result in a minor difference in your federal withholding amount.

All supplemental wages will be subject to federal income tax at 22% per IRS regulations and all pre-taxable deductions will be proportionately distributed across both supplemental wage and regular taxable wages. This may result in a minor difference in your federal withholding amount if supplemental wages are paid with regular wages.

Under section 3121(b)(10) of the Internal Revenue Code, services performed by a student in the employ of a college or university are generally exempt from Social Security (OASDI) and Medicare, the two components of the FICA tax, provided that the student is enrolled at least half-time and regularly attending classes.

The following additional requirements are contained in the IRS guidelines:

1. The student FICA exception is not applicable to career employees (e.g., TRS/ORP members).
2. The exception applies to all services performed during all payroll periods of a month or less that fall wholly or partially within the academic term.
3. The exception does not apply to services performed by a student during school breaks of more than five weeks.
4. If a student is enrolled less than half-time, the student may still be eligible if the student is in the last semester or quarter of a course of study, and is enrolled in the number of hours needed to complete the requirements for obtaining a degree. This exception will only be granted once per academic level (BA, MS, Ph.D.). Students will be required to submit a FICA Exemption Exception Form (linked to the Registrar's Office) in order to have the exception applied. 

To qualify for the exception the student must be enrolled in the minimum number of Semester Credit Hours (SCH) detailed below:

• Undergraduate Students
  • Fall or Spring Semesters - 6 SCH
  • Maymester or Summer  Semesters - 4 SCH
• Graduate Students
  • Fall or Spring Semesters - 4 SCH
  • Maymester or Summer  Semesters - 3 SCH

Further information can be found here detailing the FICA exception.

For questions related to the Student FICA Tax Exception, please contact Daniel Salazar or Anna Elizalde.