Social Security Tax

Tax Planning
Updated Apr 2026

A federal payroll tax that funds Social Security retirement, disability, and survivor benefits.

Tax laws change annually and vary by country. The information on this page is for educational purposes only. Always verify figures with current official sources (IRS, HMRC, CRA, ATO) and consult a qualified tax professional before making any tax-related decision.

What is Social Security Tax?

Social Security tax is a federal payroll tax collected under the Federal Insurance Contributions Act (FICA) to fund the Social Security program, which provides retirement, disability, and survivor benefits. For 2024, employees pay 6.2% on wages up to the Social Security wage base ($168,600), matched by an equal 6.2% employer contribution for a combined 12.4%. Self-employed individuals pay the full 12.4% but may deduct half as a business expense. Wages above the wage base are exempt, making Social Security tax regressive for high earners. The wage base adjusts annually for wage inflation.

Example

Example

An employee earning $168,600 in 2024 pays the maximum Social Security tax: 6.2% × $168,600 = $10,453. An employee earning $300,000 also pays exactly $10,453—wages above the $168,600 cap are exempt from Social Security tax, so the effective Social Security tax rate declines sharply above the wage base.

Source: IRS — Topic No. 751: Social Security and Medicare Withholding Rates