Social Security taxes
Workers and their employers are taxed on wages and other compensation up to an annual limit to pay for Social Security benefits. Self-employed individuals pay both the worker's and the employer's shares of the Social Security tax.
- Employees - For workers employed by somebody else:
- Employee pays 6.2%
- Employer pays 6.2%
- Self-employed individual pays 12.4%
- Compensation limit - Social Security taxes are paid on compensation up to set annual limit. Above that limit, no Social Security taxes are paid. The limit is indexed for inflation.
- 2014 limit: $117,000
- Medicare taxes - In addition to Social Security taxes, workers also pay Medicare taxes on their compensation. There is no compensation limit for Medicare taxes.
- Employee pays 1.45%
- Employer pays 1.45%
- Self-employed pays total of 2.9%
II. Eligibility and benefit: Retirement
RetirementThe short answer is, current earners. Taxes on current wages pay the Social Security benefits of retirees, the disabled, children and other beneficiaries.
RetirementThe Federal Insurance Contributions Act is a U.S. law that requires a paycheck deduction be paid to Social Security and Medicare.
RetirementIf, and how much, your social security benefits are taxed depends on your income and where you live.
RetirementSocialism is a loaded word in the U.S., but Social Security, one of the nation's most popular benefit programs, is wholly government-run.
RetirementFind out how Social Security really works, why the system is in trouble and whether retirees are simply living too long for Social Security to remain viable.
RetirementWhat you should know about the relationship between the stock market and your monthly Social Security check.
RetirementHere's what you may not know about our Social Security system and how it can affect your future.
RetirementThe average retiree’s check will rise by 1.7% in 2015, the Social Security Administration says. And the ceiling on taxable earnings will rise, as well.
RetirementIs the fear that Social Security won’t be around when the younger generations retire valid?
RetirementSocial Security is a significant driver of the US economy--as good a reason as any to make sure you understand it!