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.

  1. Employees - For workers employed by somebody else:
    • Employee pays 6.2%
    • Employer pays 6.2%
  2. Self-employed
    • Self-employed individual pays 12.4%
  3. 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
  4. 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

Related Articles
  1. Retirement

    Will the Social Security Cap Increase Help It Last Longer?

    The Social Security cap increase will be 7% in 2017, but even that may not be enough to keep Social Security from running out of funds.
  2. Retirement

    Understanding Your FICA Payments

    The Federal Insurance Contributions Act is a U.S. law that requires a paycheck deduction be paid to Social Security and Medicare.
  3. Retirement

    Are Social Security Benefits a Form of Socialism?

    Socialism is a loaded word in the U.S., but Social Security, one of the nation's most popular benefit programs, is wholly government-run.
  4. Retirement

    8 Types of Americans Who Won't Get Social Security

    Most Americans eventually get Social Security retirement benefits. Those who don't need a solid Plan B.
  5. Taxes

    Is it Smart to Avoid Paying Federal Income Tax?

    Not paying federal income taxes might sound appealing, but is it really a good idea?
  6. Retirement

    6 Benefits You're Required by Law to Offer Your Employees

    Learn about the benefits that a business must offer to employees, such as family and medical leave, as well as various forms of insurance coverage.
  7. Retirement

    Introduction to Social Security

    You've probably contributed to this fund, but will you reap the benefits? Find out here.
  8. Retirement

    4 Things That Are Reducing Your Social Security

    Worried about Social Security dwindling? We discuss four ways it’s already happening.
  9. Retirement

    Will Social Security Be Around for My Retirement?

    Here's what you may not know about our Social Security system and how it can affect your future.
  10. Retirement

    Can the Market Affect Social Security Benefits?

    What you should know about the relationship between the stock market and your monthly Social Security check.
Frequently Asked Questions
  1. Where do most fund managers get their market information?

    Many fund managers, whether they manage a mutual fund, trust fund, pension or hedge fund, have access to resources that the ...
  2. What's the difference between short-term investments and marketable securities?

    Understand the difference between short-term investments and marketable equity securities, and learn the importance of short-term ...
  3. Are fringe benefits direct or indirect costs?

    Learn how to allocate costs associated with fringe benefits provided to employees and how to determine when a cost is either ...
  4. How is a bank guarantee different from a traditional loan?

    Read about the differences between a traditional bank loan and a bank guarantee, and why a third party might require a guarantee ...
Trading Center