The purpose of the wage base used for the Social Security tax is ________.
A) to determine when to start withholding the tax from an employee's pay
B) to determine the amount of Social Security tax to withhold from an employee's pay
C) to establish a maximum salary level for application of the tax to employee pay
D) to compute the total amount of Social Security tax that a ﬁrm must pay

Question

Quizplus · Accepted Answer

The wage base is the maximum amount of an employee's salary that is subject to the Social Security tax. Once an employee's wages exceed the wage base, no additional Social Security tax is withheld. This establishes a maximum salary level for the application of the tax to employee pay.

The Purpose of the Wage Base Used for the Social