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