What Social Security Taxes Are and Who Pays Them
Social Security taxes are payroll deductions that fund the Social Security program, which provides retirement, disability, and survivor benefits. In 2025, the tax rate remains at 6.2% of your wages if you are an employee, and your employer pays a matching 6.2%. If you are self-employed, you pay both portions — 12.4% total — on your net business income.
The tax applies only to earnings up to a certain limit, called the wage base. For 2025, that limit is $168,600. This means you stop paying Social Security tax once your earnings reach that amount in a calendar year. Medicare taxes, which fund a different program, have no wage cap and continue on all earnings above the Social Security limit.
Social Security taxes appear on your pay stub as "OASDI" (Old-Age, Survivors, and Disability Insurance) or straightforward "Social Security." If you work for an employer, the tax is withheld automatically. If you are self-employed, you pay it when you file your annual tax return through self-employment tax.
Key Takeaways
- The Social Security tax rate in 2025 is 6.2% for employees and 6.2% for employers, or 12.4% total for self-employed workers.
- Social Security tax applies only to earnings up to $168,600 in 2025; earnings above that amount are not subject to this tax.
- Self-employed workers pay both the employee and employer portions of Social Security tax on their net business income.
- Social Security taxes fund retirement, disability, and survivor benefits, separate from Medicare taxes.
The 2025 Wage Base and How It Affects Your Paycheck
The wage base — the maximum amount of earnings subject to Social Security tax — changes each year based on national wage trends. For 2025, it is $168,600, up from $168,600 in 2024. This means if you earn $168,600 or less in 2025, all of your wages are subject to the 6.2% Social Security tax. If you earn more, only the first $168,600 is taxed.
The wage base increase matters most to higher earners. Someone making $200,000 in 2025 pays Social Security tax on only the first $168,600 of that income. The remaining $31,400 is not subject to Social Security tax, though it is still subject to Medicare tax (2.9%) and income tax withholding.
If you have multiple jobs in 2025, you may pay more Social Security tax than necessary if your combined earnings exceed the wage base. For example, if you earn $100,000 at one job and $80,000 at another, you will pay the full 6.2% on both, totaling $11,160 in Social Security tax. You can claim a credit on your tax return for the overpayment, but you must file to receive it.
How Self-Employment Social Security Taxes Work
Self-employed workers — including freelancers, contractors, and small business owners — pay both the employee and employer portions of Social Security tax, totaling 12.4% on net business income. You calculate this as self-employment tax on Schedule SE when you file your annual tax return.
To calculate self-employment tax, you start with your net business income (revenue minus business expenses). You then multiply that by 92.35% to account for the employer portion deduction, then explore the 12.4% rate. The result is your self-employment tax for the year. Like employees, self-employed workers pay this tax only on income up to the $168,600 wage base.
Self-employed workers can deduct half of their self-employment tax as a business expense on their tax return, which reduces their overall tax burden. This deduction roughly mirrors the tax benefit that employees receive when their employer pays the matching portion on their behalf.
Social Security Tax Withholding on Your Paycheck
If you are an employee, your employer withholds Social Security tax from each paycheck automatically. The amount withheld is 6.2% of your gross wages, up to the $168,600 annual wage base. Your pay stub will show this withholding separately, usually labeled "Social Security" or "OASDI."
Your employer also pays a matching 6.2% on your behalf, but this does not appear on your paycheck — it is a separate employer expense. Both the employee and employer portions go into the Social Security Trust Fund to pay current and future benefits.
If you change jobs during the year, each employer withholds Social Security tax independently. If your combined earnings across all jobs exceed the wage base, you will have overpaid. When you file your tax return, you can claim a credit for the overpayment, and the IRS will refund the excess amount.
What Happens to Your Social Security Taxes
The Social Security taxes you pay in 2025 do not go into a personal account with your name on it. Instead, they go into the Social Security Trust Fund, which pays benefits to current retirees, disabled workers, and survivors of deceased workers. The program operates on a pay-as-you-go basis: current workers' taxes fund current beneficiaries' payments.
When you reach full retirement age — which ranges from 66 to 67 depending on your birth year — you become may be able to access to receive Social Security retirement benefits based on your earnings record. The amount you receive depends on how much you earned over your lifetime and when you choose to start benefits. Workers who have paid into Social Security for at least 10 years (40 quarters) are generally may be able to access for benefits.
Your earnings record is tracked by the Social Security Administration using your Social Security number. You can view your estimated benefits and earnings history by creating an account at ssa.gov. This record is important because it determines the amount of retirement, disability, or survivor benefits you or your family may receive.
Changes to Social Security Taxes and Future Considerations
The Social Security tax rate of 6.2% has remained unchanged since 1990. However, the wage base increases most years to keep pace with wage growth. In recent years, the wage base has grown steadily — it was $160,200 in 2023 and $168,600 in 2025.
The Social Security Trust Fund faces long-term funding challenges. According to the Social Security Administration's trustees, the combined trust funds for retirement and disability benefits are projected to be depleted around 2033 if no changes are made. After that date, incoming tax revenue would cover only about 80% of scheduled benefits. Congress may eventually adjust tax rates, the wage base, benefit amounts, or the full retirement age to address this shortfall, but no changes have been enacted as of 2025.
Workers nearing retirement should monitor any legislative changes, as future adjustments could affect their benefits. Younger workers have more time for any changes to take effect and may see different rules by the time they reach retirement age.
Frequently Asked Questions
Do I pay Social Security tax on all my income?
No. In 2025, Social Security tax applies only to earnings up to $168,600. Any income above that amount is not subject to the 6.2% Social Security tax, though it is still subject to Medicare tax and income tax withholding. If you are self-employed, the same wage base limit applies to your net business income.
What if I work two jobs and pay too much Social Security tax?
If your combined earnings from multiple jobs exceed $168,600 in 2025, you will have overpaid Social Security tax. When you file your tax return, you can claim a credit for the overpayment on Form 1040. The IRS will refund the excess amount as part of your tax refund or reduce the taxes you owe.
Is Social Security tax the same as Medicare tax?
No, they are separate taxes that fund different programs. Social Security tax is 6.2% (or 12.4% for self-employed) and applies only to earnings up to $168,600 in 2025. Medicare tax is 2.9% (or 5.8% for self-employed) and applies to all earnings with no wage cap. Higher earners also pay an additional 0.9% Medicare tax on earnings above certain thresholds.
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 exceptions are certain government employees hired before specific dates and some religious groups that have received exemptions. If you are a regular employee or self-employed, you must pay Social Security tax on your earnings.
How do I know how much Social Security tax I have paid?
You can view your Social Security earnings record and estimated benefits by creating a my Social Security account at ssa.gov. Your annual Social Security Statement shows your lifetime earnings and the taxes you have paid. You can also see your annual Social Security tax withholding on your Form W-2 (employees) or Schedule SE (self-employed) when you file your tax return.