The national average wage index for 2025 is $72,800.33, and that one number sets a long list of Social Security dollar limits for 2027. The Social Security Administration published it October 26 in its annual determinations notice in the Federal Register. The most visible result is a taxable earnings ceiling of $192,300 for 2027, up from $184,500.
How $72,800.33 turns into a $192,300 ceiling
The notice, 91 FR 67380, lays out the formula. The 1994 base of $60,600 is multiplied by the ratio of the 2025 wage index to the 1992 index, then rounded to the nearest $300. If that result beats the current base of $184,500, it becomes the base for 2027.
It did. The notice says that because $192,300 exceeds the current base amount of $184,500, the contribution and benefit base is $192,300 for 2027. That is $7,800 higher than the current base, and it moves only because average pay moved.
The question of what sets the amount of earnings Social Security taxes next year therefore has a plain answer. It is the wage index, not the cost-of-living adjustment, and SSA runs the formula every October. The ceiling is the most a worker can have taxed for Social Security in 2027, and also the most that counts toward benefits.
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SSA’s wage index series shows where the 2025 figure came from. SSA multiplies the prior year’s index by the percentage change in average wages from its own tabulated wage data. The 2024 index was 69,846.57, so the 2025 index is 4.23 percent higher.
Recent years show the climb: 63,795.13 for 2022, 66,621.80 for 2023, 69,846.57 for 2024 and 72,800.33 for 2025. The 2025 figure is about 14 percent above the 2022 index. SSA says the wages it tabulates cover pay subject to federal income taxes and contributions to deferred compensation plans.
The other limits that move with it
The same index sets the retirement earnings test amounts. The notice gives $2,130 a month for beneficiaries who reach full retirement age after 2027 and $5,660 a month for those who reach it in 2027. That works out to $25,560 and $67,920 a year, against 2026 amounts of $24,480 and $65,160.
SSA’s earnings test page explains what those amounts do. Benefits are withheld $1 for every $2 of earnings above the lower amount, and $1 for every $3 above the higher amount in the year full retirement age is reached. Withheld benefits are not lost, because the monthly benefit is raised permanently once full retirement age arrives.
The quarter-of-coverage threshold for 2027 is $1,970 in taxable earnings. The statutory blind substantial gainful activity amount, the monthly earnings level SSA uses to judge work by a blind beneficiary, is $2,950. The notice lists $1,770 a month for non-blind beneficiaries with a disability, but that figure is set through a separate rule rather than directly by the index.
The index also adjusts the old-law contribution and benefit base, the trial work period threshold and the coverage thresholds for domestic workers and election workers, SSA’s notice summary says. Each of those is a dollar line a worker or employer may run into in 2027, and each traces back to the same $72,800.33.
The index also moves the benefit formula. The bend points in the primary insurance amount formula are $1,340 and $8,077 for 2027, and the maximum family benefit bend points are $1,712, $2,471 and $3,223. A worker’s earlier earnings are also scaled up by the index, to the average wage level two years before the year of first eligibility at 62.
What the index is not
Mark Steffensen, SSA’s Chief of Law, Policy and Legislative Affairs, signed the notice, which runs pages 67380 to 67385 of the Federal Register. SSA files it each autumn once the new wage data are in.
The wage index is not a raise in anyone’s benefit, and it is not anyone’s earnings. It is a 2025 measurement of average pay, published in the fall of 2026 to set 2027 amounts. SSA lists it alongside the cost-of-living adjustment in a table of annual increases, but the two do different jobs.
The Pension Benefit Guaranty Corporation uses the same index to compute premium rates for insured pension plans, so the figure reaches beyond Social Security.
The ceiling works as a cutoff. A worker paid $200,000 in 2027 would have Social Security tax applied to the first $192,300 and none on the remaining $7,700. Pay under the ceiling is taxed in full, so the higher base changes the bill only for those earning above $184,500 now.
For a worker with earnings near the ceiling, the practical change is $7,800 more of pay counted next year. For a retiree who is still working, the change is in the earnings test amounts. The open question for anyone in that position is which of the two limits applies in the year full retirement age is reached.
Working past 62 with the 2027 earnings limits coming?
A beneficiary who is still working and under full retirement age can have $1 withheld for every $2 earned above the lower limit. Misjudging which limit applies in the year full retirement age arrives is how a check comes up short.
The Social Security Claiming & Family Benefits Kit includes the 2026 earnings-test rules and a claiming calculator in Excel for claiming age, break-even and survivor benefits. The calculator covers the age decision, so a worker can see what waiting adds before choosing a start date.
Test claiming ages against the earnings limits in the calculator →
More Financial Reading
- 21 Ways to Stretch a $2,087 Social Security Check
- 15 Places to Find Your Share of the $4.25 Billion States Give Back
- The New $6,000 Senior Deduction and 14 More Tax Moves for Retirees
This article was produced with AI assistance and edited for accuracy against the sources linked above.
