Taxable Wage Base Law and Legal Definition
Taxable wage base is considered to be the maximum amount of wages that is subject to Social Security taxes. Any income in excess of this amount is not subject to social security taxes. Usually, employers calculate the taxable wage base and an employee’s tax would be paid for each pay period in relation to his/her income. The IRS (Internal Revenue Service) takes into account the amounts received and verifies whether it is in accordance to the regulations or not. The gross wages earned by an employee and taxable wage base used for assessment may be identical. Their relation is governed by the laws of taxation.