What the Social Security tax rate is and who pays it
Social Security tax takes 6.2% of your wages, up to a yearly income cap. Your employer matches that 6.2%, so the total going into the system is 12.4% — but you only see the 6.2% deducted from your paycheck. If you are self-employed, you pay both halves yourself: 12.4% total.
The income cap changes each year. In 2024, you pay Social Security tax on earnings up to $168,600. Anything you earn above that number is not subject to Social Security tax. The cap is adjusted annually based on wage growth, so it will be higher in 2025 and beyond.
This tax applies to most workers in the United States. Federal employees hired before 1984, railroad workers, and some government employees in certain states may have different systems. If you work for a nonprofit or government agency, you still pay Social Security tax unless your employer is specifically exempt.
Key Takeaways
- You pay 6.2% of your wages into Social Security, and your employer pays another 6.2% on your behalf.
- The income cap for Social Security tax changes yearly — in 2024 it is $168,600, meaning earnings above that are not taxed.
- Self-employed workers pay the full 12.4% themselves because they are both employee and employer.
- Social Security tax is separate from Medicare tax (1.45%) and federal income tax, and appears as a distinct line on your pay stub.
How the tax appears on your paycheck
Your pay stub shows Social Security tax as a separate deduction, usually labeled "FICA-Social Security" or "OASDI" (Old-Age, Survivors, and Disability Insurance). The amount depends on your gross pay for that period. If you earn $2,000 in a paycheck, your Social Security deduction is $124 (6.2% of $2,000).
The deduction stops once you hit the yearly income cap. If you earn $168,600 in 2024 and reach that cap in November, your December paycheck will not have a Social Security tax deduction. This matters most if you have multiple jobs — you may pay the tax on earnings from both employers even though your combined income exceeds the cap. You can claim a credit for the overpayment when you file your tax return.
Self-employed workers and the Social Security tax
If you are self-employed, you pay Social Security tax through the self-employment tax, calculated on Schedule SE of your tax return. You pay 12.4% on net self-employment income (your business profit minus business expenses), up to the same yearly cap as wage earners.
Self-employed workers can deduct half of their self-employment tax when calculating adjusted gross income, which reduces the overall tax burden slightly. You still pay the full 12.4%, but the deduction makes the effective rate lower than it appears. Quarterly estimated tax payments usually include your self-employment tax, so you do not have to pay it all at once when you file.
What happens to the money you pay
Social Security tax funds three programs: retirement benefits for workers age 62 and older, disability benefits for workers who cannot work due to a medical condition, and survivor benefits for the families of workers who die. The money does not sit in an account with your name on it. Instead, current workers' taxes pay current retirees and beneficiaries.
Your earnings record — the amount you paid in over your working years — determines how much you receive when you claim benefits. The Social Security Administration tracks your contributions and uses them to calculate your benefit amount. You can view your earnings record online through your my Social Security account at ssa.gov.
How the tax rate has changed over time
The Social Security tax rate has been 6.2% for employees (and 6.2% for employers) since 1990. Before that, the rate was lower — it started at 1% in 1937 and increased gradually as the program expanded. The rate is set by Congress and can only be changed through legislation.
The income cap, by contrast, changes every year. It is tied to the average wage index, so it rises when wages across the country rise. This means higher-earning workers pay more into Social Security over time, even though the percentage rate stays the same.
Medicare tax and other payroll deductions
Social Security tax is often confused with Medicare tax because both appear on your paycheck and both are part of FICA (Federal Insurance Contributions Act). Medicare tax is 1.45% of all your wages with no income cap — you pay it on every dollar you earn. An additional 0.9% Medicare tax applies to wages over $200,000 for single filers (or $250,000 for married couples filing jointly).
Federal income tax is separate from both Social Security and Medicare tax. The amount withheld depends on your W-4 form and your income level. State and local income taxes, where they exist, are also separate deductions. Your pay stub should itemize each one so you can see exactly where your money goes.
Frequently Asked Questions
What happens if I work multiple jobs and pay Social Security tax on both?
You may pay more Social Security tax than required if your combined earnings from all jobs exceed the yearly cap. When you file your tax return, you can claim a credit for the overpayment. The IRS will refund the excess amount or apply it to other taxes you owe.
Do I pay Social Security tax on bonuses and overtime?
Yes. Social Security tax applies to all wages and salary, including bonuses, overtime, and commissions. The tax is calculated on your gross pay before any deductions. Once your total earnings for the year hit the income cap, no further Social Security tax is withheld.
Can I opt out of paying Social Security tax?
No. Social Security tax is mandatory for nearly all workers in the United States. The only exceptions are certain government employees, railroad workers covered by a separate system, and some nonprofit employees whose employers have obtained a specific exemption.
Does the Social Security tax rate ever go down?
The rate has remained at 6.2% for employees since 1990. Congress would need to pass new legislation to change it. The income cap increases yearly based on wage growth, but the percentage rate itself has been stable for over 30 years.