The shutdown extension can cost you
If you earn more than the national average, you could be affected by the ongoing government shutdown in ways you didn’t foresee. Normally, by early January, the Social Security Administration (SSA) would close the books on the new wage base—the earnings threshold that determines how much of your income is subject to Social Security taxes.
But because the shutdown has slowed federal operations, the SSA hasn’t yet released those numbers for 2026. That means uncertainty for millions of working Americans—especially high earners. Once the announcement comes, it’s likely the wage base will increase, meaning you’ll pay more in Social Security taxes next year.
This isn’t a tax rate change. This is a change to the salary cap. As the cap increases, more of your paycheck is taxed. For everyone at or above the average income, the result could be hundreds—or thousands—of extra dollars contributed.
What the wage base really means
Let’s put it in plain language. Social Security taxes are withheld from your wages to assist in paying benefits such as retirement, disability, and survivors’ insurance. But not all of your income — only a part — is taxed on a yearly basis.
That limit is called the Social Security wage base. For example, in 2025, the first $168,600 of your earnings was taxed for Social Security. Any amount above that limit is not taxed for Social Security; however, it is taxed for Medicare.
Every year, this wage base is updated to accommodate wage increases and inflation. You pay more of your earnings in taxes when it increases. That’s what’s planned for 2026—but because of the government shutdown, we don’t know how big it will be.
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Why the increase matters
This shift isn’t just about pulling an extra buck out of your paycheck—it’s about keeping the Social Security system afloat. As more and more Americans retire and live into old age, the system needs steady funding to keep paying out.
Raising the wage base helps to make that a reality. It gets more of the high earners contributing, something that can help pay for more beneficiaries as they rise in number. Put simply, these contributions today pay for today’s retirees and keep the system going for generations to come—including your generation.
But for many workers, this change would squeeze budgets. If you already have to juggle big bills like a house mortgage or college tuition, a bigger payroll deduction would squeeze. That’s why it’s worth preparing and understanding what will happen.
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How to prepare
Even though the SSA has not released the actual numbers yet, it makes sense to prepare for the increase. Here’s what you can do:
- Check your income and paycheck deductions — To estimate next year’s pay deductions, check how much of this year’s income is taxed under Social Security.
- Adjust your budget in advance — If you’ll be paying more, saving a little extra each month now can help reduce the shock later.
- Talk with your boss or accountant — They can help you guesstimate the effect that an increased wage base could have on your after-tax pay and 2026 tax planning.
- Being proactive will keep you from being surprised at tax time or seeing your first paycheck stub of next year.
Reminded once again of why Social Security is counted
While this is going to be a pain-filled headline, it’s also a reminder of how Social Security works—as an insurance program to share with all that provides for all workers. Your contributions don’t go into thin air; they are used to provide financial support to retirees, the disabled, and survivors of deceased workers.
Routine changes like this one are part of keeping the system sustainable. And by planning ahead, these changes won’t disrupt your financial goals.
Yes, so—if the wage base grows in 2026, you could pay more into Social Security. But knowing now means you can face those changes head-on with the knowledge that you’re contributing to your own security down the road and the nation’s safety net.
