The Social Security tax rate is 6.2 percent of your wages

Your employer withholds 6.2 percent of your gross pay for Social Security tax. If you are self-employed, you pay both the employee and employer portions — 12.4 percent total — though you can deduct half of it on your tax return.

This rate has been the same since 1990. It applies to wages up to a yearly cap, which changes each year. For 2024, you stop paying Social Security tax once your earnings reach $168,600. In 2025, that cap rises to $176,100. After you hit the cap, no more Social Security tax comes out of your paycheck for the rest of that year.

Your employer also pays 6.2 percent on your behalf — that is a separate cost to them and does not reduce your take-home pay further. Together, the employee and employer portions fund the Social Security trust fund, which pays retirement, disability, and survivor benefits.

Key Takeaways

  • Social Security tax is 6.2 percent of your wages if you are an employee, withheld automatically from each paycheck.
  • Self-employed workers pay 12.4 percent total (both the employee and employer share), though half is tax-deductible.
  • The tax only applies to earnings below an annual cap — $176,100 in 2025 — so high earners stop paying partway through the year.
  • Your employer pays a matching 6.2 percent on top of what you pay, which does not come out of your paycheck.

How the annual earnings cap works

Once your year-to-date earnings reach the cap, your employer stops withholding Social Security tax from your paychecks. This means if you earn $200,000 in a year, you will pay Social Security tax only on the first $176,100 (in 2025), not on the remaining $23,900.

The cap exists because Social Security benefits are tied to your earnings history, and the program has a maximum benefit amount. High earners hit that maximum faster, so the tax stops explore once the cap is reached. The cap increases most years to keep pace with wage growth — the Social Security Administration announces the new cap each October for the following year.

If you change jobs during the year, each employer withholds based on what you earned at that job alone. You might overpay if your combined earnings from multiple jobs exceed the cap. When that happens, you can claim a credit for the overpayment on your tax return.

The difference between Social Security and Medicare tax

Social Security tax and Medicare tax are separate. Social Security is 6.2 percent; Medicare is 1.45 percent. Together they make up what is called FICA (Federal Insurance Contributions Act) tax, and both are withheld from your paycheck.

Unlike Social Security, Medicare tax has no annual earnings cap — it applies to all your wages, no matter how much you earn. If you earn over $200,000 (single) or $250,000 (married filing jointly), an additional 0.9 percent Medicare tax applies to the amount above those thresholds.

When you see your pay stub, the line item usually shows "FICA" or lists "Social Security" and "Medicare" separately. The two programs are funded independently and pay different benefits — Social Security covers retirement, disability, and survivor benefits, while Medicare covers hospital insurance and medical expenses for people 65 and older.

What happens to the Social Security tax you pay

The Social Security tax you pay does not go into a personal account with your name on it. Instead, it funds the Social Security trust fund, which currently pays benefits to about 67 million people — retirees, disabled workers, and survivors of deceased workers.

Your earnings record is tracked by the Social Security Administration under your Social Security number. When you reach retirement age (between 66 and 67 for most people born after 1954), your benefit amount is calculated based on your 35 highest-earning years. The more you earned and the longer you worked, the higher your benefit.

You can view your earnings record and benefit estimate by creating an account at ssa.gov. The Social Security Administration sends statements showing your estimated retirement, disability, and survivor benefits based on your current earnings history.

Self-employed workers and Social Security tax

If you are self-employed, you pay both the employee portion (6.2 percent) and the employer portion (6.2 percent) of Social Security tax — a total of 12.4 percent on your net self-employment income. This is called self-employment tax.

You calculate self-employment tax on Schedule SE (Form 1040), which is part of your annual tax return. The calculation uses your net profit from self-employment (your business income minus business expenses), not your gross revenue. Once you reach the annual earnings cap, the 6.2 percent Social Security portion stops, but the 2.9 percent Medicare portion continues on all earnings.

The good news: you can deduct half of your self-employment tax as a business expense on your tax return. This reduces your taxable income and lowers your overall tax bill. Many self-employed people also make quarterly estimated tax payments to avoid a large bill at tax time.

How Social Security tax rates have changed over time

The current 6.2 percent employee rate has been in place since 1990. Before that, the rate was lower — it started at 1 percent in 1937 when Social Security began, and increased gradually over the decades as the program expanded to cover more benefits and more people.

The earnings cap has also grown significantly. In 1937, it was $3,000. By 1980, it was $25,900. The cap is adjusted yearly based on the average wage index, so it tends to rise in line with overall wage growth in the economy.

Congress sets the Social Security tax rate and earnings cap by law. Any change to either would require new legislation. There have been periodic discussions about raising the cap or the rate to address long-term funding challenges in the Social Security trust fund, but no changes have been enacted since 1983.

Reading your pay stub and understanding withholding

On your pay stub, look for a line labeled "Social Security" or "FICA-SS" (FICA-Social Security). The amount shown is 6.2 percent of your gross pay, up to the annual cap. Next to it, you should see your year-to-date Social Security tax, which helps you track whether you have hit the cap yet.

Your employer is required to withhold the correct amount each pay period. If you notice the withholding stops before year-end, that is normal — it means you reached the earnings cap. If you change jobs and your new employer does not know about your previous earnings, they may continue withholding even after you have hit the cap across all jobs. In that case, you will get a refund when you file your tax return.

You cannot opt out of Social Security tax withholding. It is mandatory for all employees and self-employed workers with net earnings of $400 or more per year. The only exception is certain religious groups that have been granted exemptions by the IRS.

Frequently Asked Questions

Can I get a refund if I overpaid Social Security tax?

Yes, if you worked multiple jobs and your combined earnings exceeded the annual cap, you overpaid. You claim the refund on your tax return using Form 1040. The IRS will refund the excess Social Security tax withheld.

Does Social Security tax explore to all types of income?

Social Security tax applies to wages and self-employment income. It does not explore to investment income, rental income, or other non-employment sources. If you have a mix of W-2 wages and self-employment income, both count toward the annual earnings cap.

What if I am not a U.S. citizen — do I still pay Social Security tax?

If you work in the United States and have a valid work visa or authorization, you pay Social Security tax like any other employee. Undocumented workers who use an Individual Taxpayer Identification Number (ITIN) also pay Social Security tax, though they cannot claim benefits.

Will the Social Security tax rate increase in the future?

The rate is set by Congress and has not changed since 1990. There is no automatic increase. Any change would require new legislation. Some proposals have suggested raising the cap or the rate to address long-term funding, but no changes are currently scheduled.

How is Social Security tax different from income tax withholding?

Social Security tax is a fixed 6.2 percent (up to the cap) and funds a specific program. Income tax withholding is based on your W-4 form and varies by person. Both are withheld from your paycheck, but they fund different programs and are calculated differently.