If you’re an employer, you’ll need to withhold social security tax from a higher amount of your employees’ wages in 2017. The wage base for withholding social security tax from wages has increased to $127,200, up from $118,500 in 2016. The federal payroll tax rate remains 7.65%, a combination of social security tax withheld at 6.2%, and Medicare tax withheld at 1.45%. There is no wage base for the 1.45% Medicare tax. You’ll withhold that percentage on all wages you pay your employees.