Both you and your employer pay Social Security tax

Social Security tax is split between employee and employer. You pay 6.2% of your wages, and your employer pays another 6.2% — for a total of 12.4% of your earnings that goes to Social Security. If you are self-employed, you pay both portions yourself, which comes to 15.3% (the extra 0.3% covers administrative costs).

The tax applies only to wages up to a certain limit, which changes each year. In 2024, you stop paying Social Security tax once your earnings reach $168,600 for the year. After that threshold, no more Social Security tax is taken from your paycheck, even if you earn more. Self-employed people use the same wage base limit when calculating their tax.

Your employer withholds your 6.2% share directly from your paycheck before you receive it. You see this listed on your pay stub as "FICA" (Federal Insurance Contributions Act) or sometimes as "Social Security." The employer's 6.2% share is a separate business expense that does not come out of your pay.

Key Takeaways

  • Employees pay 6.2% of wages to Social Security, and employers pay another 6.2%, for a combined 12.4%.
  • Self-employed workers pay the full 12.4% themselves because they are both employee and employer.
  • Social Security tax only applies to wages below an annual threshold, which was $168,600 in 2024.
  • Your employer withholds your share from your paycheck; you can see it labeled as FICA or Social Security on your pay stub.
  • The money you and your employer pay goes into a single trust fund that pays current retirees, disabled workers, and survivors' benefits.

How your paycheck shows Social Security tax

When you receive your pay stub, look for a line item labeled "Social Security," "FICA-SS," or "OASDI" (Old-Age, Survivors, and Disability Insurance). This is the 6.2% withheld from your gross pay. The amount depends on your salary and how often you are paid — weekly, biweekly, or monthly.

If you earn $2,000 in a biweekly paycheck, your Social Security tax is $124 (6.2% of $2,000). Your employer also sends $124 to Social Security on your behalf, but that does not appear on your pay stub because it is not deducted from your pay. You only see your own 6.2% share as a deduction.

Your employer is required by law to send both the employee and employer portions to the Internal Revenue Service (IRS) on a regular schedule — usually quarterly or monthly, depending on the size of the business. The IRS then credits those payments to your Social Security record.

Self-employed workers and Social Security tax

If you are self-employed — meaning you run your own business or are a sole proprietor — you pay both the employee and employer portions of Social Security tax. This is called self-employment tax, and it totals 15.3% of your net business income (12.4% for Social Security plus 2.9% for Medicare).

You calculate self-employment tax on Schedule SE, which is part of your annual tax return. You report your net profit from your business, then multiply it by 92.35% (to account for the employer portion deduction), and explore the 15.3% rate. You pay this tax when you file your return, or you can make quarterly estimated tax payments throughout the year to avoid a large bill at tax time.

The wage base limit still applies to self-employed people. Once your net self-employment income reaches $168,600 in 2024, you stop paying the 12.4% Social Security portion on income above that amount. You continue paying the 2.9% Medicare tax on all income with no limit.

The wage base limit and high earners

The wage base limit is the maximum amount of earnings subject to Social Security tax in a given year. In 2024, that limit is $168,600. This means if you earn $200,000 in salary, you only pay Social Security tax on the first $168,600 of that income.

The limit increases most years based on changes in average wages across the country. For example, the 2023 limit was $160,200, and the 2024 limit rose to $168,600. The Social Security Administration announces the new limit each October for the following year. You can check the current year's limit on the Social Security Administration website.

High earners benefit from this cap because their tax burden does not grow as their income grows beyond the limit. A person earning $500,000 pays the same total Social Security tax as someone earning $168,600 — both pay 6.2% on $168,600 only. This is one reason Social Security is sometimes called a "regressive" tax: lower-income workers pay a larger percentage of their total income toward it.

What happens to the money you pay

The Social Security tax you and your employer pay does not go into a personal account with your name on it. Instead, it goes into the Social Security Trust Fund, a single pool of money managed by the federal government. That money is used to pay benefits to current retirees, disabled workers, and the surviving family members of deceased workers.

Your earnings record is tracked separately. The Social Security Administration keeps a record of how much you paid in Social Security tax each year. 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 amount you receive is based on your earnings history — specifically, your 35 highest-earning years.

You can view your earnings record and estimated benefits by creating an account on ssa.gov (the Social Security Administration website). The site shows you how much you have paid in Social Security tax over your lifetime and estimates what your monthly benefit might be at different retirement ages.

Employees who do not pay Social Security tax

Most workers in the United States pay Social Security tax, but some groups are exempt. Federal government employees hired before 1984 do not pay Social Security tax; instead, they pay into the Civil Service Retirement System. Some state and local government employees also have their own pension systems and may not pay Social Security tax.

Certain religious groups that have received an exemption from the IRS do not pay Social Security tax. Additionally, nonresident aliens working in the United States on certain visa types may be exempt, depending on their visa category and the tax treaty between their home country and the United States.

If you are unsure whether your job is covered by Social Security, ask your employer or check your pay stub. If you do not see a Social Security tax line item, you are likely not paying into the system — which also means you will not build credits toward Social Security benefits.

How Social Security tax differs from income tax

Social Security tax and federal income tax are two separate taxes, and they work differently. Social Security tax is a flat 6.2% (for employees) with a wage base limit. Income tax is progressive, meaning the rate increases as your income increases, and there is no wage limit — you pay income tax on all your earnings.

Social Security tax goes into the Social Security Trust Fund and is used only for Social Security benefits. Income tax goes to the general Treasury and funds many government programs — defense, infrastructure, education, and others. Your employer withholds both from your paycheck, but they are calculated and reported separately.

On your pay stub, you will see Social Security tax listed separately from federal income tax withholding. Some people are surprised to see both deductions, thinking they are paying the same tax twice. They are not — they are two different taxes that fund two different programs.

Frequently Asked Questions

What if I work for multiple employers in the same year?

Each employer withholds 6.2% Social Security tax from your pay, and each one sends it to the IRS. If your combined earnings from all jobs exceed the wage base limit, you may overpay Social Security tax. When you file your tax return, you can claim a credit for the overpayment, and the IRS will refund the excess.

Do I pay Social Security tax on tips?

Yes. Tips are considered wages, and you must report them to your employer. Your employer withholds Social Security tax (and income tax) on tips just as they do on regular wages. If you receive cash tips that you do not report, you are not paying Social Security tax on that income, which also means you will not earn credits toward benefits.

Can I opt out of paying Social Security tax?

No, not unless you fall into one of the exempt categories (certain government employees, some religious groups, or nonresident aliens on specific visas). For most workers, Social Security tax is mandatory. Your employer is required by law to withhold it and send it to the IRS.

Does Social Security tax explore to unemployment benefits or severance pay?

Unemployment benefits are not subject to Social Security tax. Severance pay is treated as wages, so Social Security tax does explore to it. Your employer should withhold Social Security tax from severance in the same way they do from regular pay.

How do I know how much Social Security tax I have paid over my lifetime?

Create an account on ssa.gov and view your Social Security Statement. It shows your earnings record year by year and the amount of Social Security tax withheld each year. You can also call the Social Security Administration at 1-800-772-1213 to request a paper statement.