Your employer and you each pay 6.2% of your wages into Social Security

Social Security tax is calculated as a percentage of your gross wages—the money you earn before deductions. The rate is 6.2% for employees and 6.2% for employers, for a total of 12.4% when you add them together. If you are self-employed, you pay both portions yourself, which comes to 15.3% (the extra 0.9% covers administrative costs).

The tax applies only to wages up to a certain limit, called the wage base. In 2024, that limit is $168,600. Once your earnings reach that amount in a calendar year, you stop paying Social Security tax on anything above it. This is why high earners pay a smaller percentage of their total income into Social Security than lower-wage workers do.

Your employer withholds your 6.2% share directly from your paycheck. You will see it listed as "Social Security" or "OASDI" (Old-Age, Survivors, and Disability Insurance) on your pay stub. The employer's 6.2% is paid separately and does not come out of your check.

Key Takeaways

  • Social Security tax is 6.2% of your wages for employees, withheld automatically from each paycheck.
  • The tax applies only to earnings up to the annual wage base limit, which changes each year and was $168,600 in 2024.
  • Once you reach the wage base limit in a calendar year, no more Social Security tax is taken from your remaining paychecks that year.
  • Self-employed workers pay 15.3% total (both the employee and employer portions), though they can deduct half of it on their tax return.
  • Your Social Security tax contributions are tracked by the Social Security Administration and used to calculate your future retirement, disability, or survivor benefits.

How the wage base limit works in practice

The wage base limit resets on January 1 of each year. The Social Security Administration announces the new limit in October of the previous year, and it usually increases slightly to account for wage growth across the economy. The limit varies by year—it was $160,200 in 2023 and $168,600 in 2024.

Here is how it affects your paycheck: if you earn $180,000 in a year, you pay 6.2% Social Security tax only on the first $168,600 (assuming 2024 limits). That is $10,453.20 in Social Security tax. The remaining $11,400 of your income is not subject to Social Security tax at all. Your employer, however, still pays their 6.2% on the full $168,600.

If you work for multiple employers in the same year, each one withholds Social Security tax independently up to the wage base limit. If your combined earnings across all jobs exceed the limit, you may have overpaid Social Security tax. You can claim a refund of the overpayment when you file your federal income tax return.

Why Social Security tax has a wage limit but Medicare tax does not

Social Security and Medicare are two separate payroll taxes, and they work differently. Social Security tax (6.2%) has the annual wage base limit. Medicare tax (1.45%) has no limit—it applies to all your wages, no matter how much you earn.

The reason is how the programs are structured. Social Security is an insurance program where your benefits are tied to your earnings history. The program replaces a percentage of your pre-retirement income, so there is a practical ceiling on how much benefit you can receive. Medicare is a health insurance program that covers hospital and medical costs, which do not scale the same way.

High earners also pay an additional 0.9% Medicare tax on wages above $200,000 (single filers) or $250,000 (married filing jointly). This extra tax has no wage limit and was added in 2013 to help fund the Affordable Care Act.

How self-employed workers calculate their Social Security tax

If you are self-employed, you pay Social Security tax through self-employment tax, calculated on your Schedule SE form when you file your annual tax return. Self-employment tax is 15.3% total: 12.4% for Social Security and 2.9% for Medicare.

You calculate it on your net self-employment income—your business income minus business expenses and a deduction for half of your self-employment tax itself. The Social Security portion (12.4%) still applies only to earnings up to the annual wage base limit. If you also have a W-2 job, the wages from that job count toward your wage base limit, so you may not owe self-employment tax on all your self-employment income.

When you file your tax return, you can deduct half of your self-employment tax as an adjustment to income. This partially offsets the fact that you are paying both the employee and employer portions.

How your Social Security tax connects to your future benefits

The Social Security Administration tracks every dollar you pay in Social Security tax through your Social Security number. This record is called your earnings record. When you reach retirement age, become disabled, or if your family members become may be able to access for survivor benefits after your death, the Social Security Administration uses your earnings record to calculate how much you will receive.

Your benefit amount is based on your highest 35 years of earnings. The more you earn (up to the wage base limit each year), the higher your future benefit will be. If you have fewer than 35 years of earnings, zeros are counted for the missing years, which lowers your average.

You can view your earnings record and benefit estimate by creating an account on ssa.gov. The Social Security Administration recommends checking your record every few years to make sure it is accurate. If you spot an error, you can contact your local Social Security office to correct it.

What happens if you change jobs mid-year

If you change jobs during the year, each employer withholds Social Security tax independently. Your new employer does not know how much you have already paid to Social Security at your previous job, so they will withhold 6.2% from your paychecks until you reach the wage base limit with them.

If your combined earnings from all jobs exceed the wage base limit, you will have overpaid Social Security tax. For example, if you earned $100,000 at Job A and then switched to Job B where you earned another $80,000, your total is $180,000. You paid 6.2% on the full $100,000 at Job A and 6.2% on the full $80,000 at Job B, even though only $168,600 of your combined income should have been taxed (in 2024).

You cannot claim the overpayment directly on your paycheck. Instead, you report it when you file your federal income tax return. The IRS will refund the overpayment as part of your tax refund or reduce the amount you owe.

How wage garnishments and other deductions affect Social Security tax

Social Security tax is calculated on your gross wages—before any other deductions. This means it is withheld even if your paycheck is being garnished for child support, student loans, or a court judgment. The order of withholding is: federal income tax, then Social Security and Medicare taxes, then other deductions like health insurance premiums or 401(k) contributions.

Pre-tax deductions like health insurance premiums and traditional 401(k) contributions reduce your taxable income for federal income tax purposes, but they do not reduce the wages subject to Social Security tax. You pay Social Security tax on the full amount before those deductions are taken out.

If you have questions about how a specific deduction affects your Social Security tax, ask your payroll department or review your pay stub carefully. Your pay stub should show your gross wages, the amount withheld for Social Security, and your net pay after all deductions.

Frequently Asked Questions

Can I opt out of paying Social Security tax?

No. Social Security tax is mandatory for all employees and self-employed workers in the United States. The only exception is certain religious groups that have received a formal exemption from the IRS, and even then, the exemption applies only to self-employment tax, not wages from an employer.

What if I made a mistake on my Social Security earnings record?

Contact your local Social Security office or call 1-800-772-1213 to report an error. Bring your Social Security card, proof of citizenship, and recent pay stubs or tax returns as evidence. The Social Security Administration can correct errors going back several years, but it is best to report them as soon as you notice them.

Does Social Security tax explore to tips, bonuses, and commissions?

Yes. Tips, bonuses, commissions, and other forms of compensation are subject to Social Security tax. Your employer should include these in your gross wages when calculating the 6.2% withholding. If you receive cash tips, you are required to report them to your employer so they can withhold the correct amount.

If I work part-time and earn below the wage base limit, do I still pay Social Security tax?

Yes. Social Security tax applies to all wages, regardless of how much you earn. There is no minimum earnings threshold. Even if you earn $1,000 in a year, you pay 6.2% Social Security tax on it (your employer also pays 6.2%). The wage base limit only sets a ceiling on how much of your earnings are taxed, not a floor.

How often does the wage base limit change?

The wage base limit changes annually, usually increasing slightly. The Social Security Administration announces the new limit in October for the following year. The increase is tied to the national average wage index, so it reflects wage growth across the economy. You can find the current and historical wage base limits on ssa.gov.