Who pays Social Security taxes and how much

If you work as an employee, you pay Social Security tax through payroll deduction. Your employer withholds 6.2% of your wages up to a yearly earnings cap — in 2024, that cap is $168,600, meaning the maximum you pay that year is $10,453.20. Your employer also pays 6.2% on your behalf, for a combined 12.4% total.

If you are self-employed, you pay both the employee and employer portions yourself: 12.4% of your net self-employment income, though you can deduct half of this amount when calculating your income tax. The earnings cap applies to you as well.

Not all work counts toward Social Security. Federal employees hired before 1984, some state and local government workers, and certain railroad employees pay into different systems instead. If you work for a nonprofit or religious organization that has not elected Social Security coverage, you may not pay into the system at all.

Key Takeaways

  • Employees pay 6.2% of wages up to the yearly earnings cap, and employers match that amount.
  • Self-employed workers pay 12.4% of net self-employment income, but can deduct half when filing taxes.
  • Your payment record is tracked by the Social Security Administration using your Social Security number, and you can view it online through your personal account.
  • The money you pay does not sit in an account with your name on it; it funds current benefits for retirees, disabled workers, and survivors.
  • You need 40 work credits (roughly 10 years of covered work) to be may have access to to your own retirement or disability benefits.

How the Social Security Administration tracks your payments

The Social Security Administration (SSA) records your earnings each year using your Social Security number. Your employer or you (if self-employed) report these earnings to the Internal Revenue Service (IRS) on your tax return or through payroll reporting, and the IRS shares that information with the SSA.

You can view your earnings record online by creating a my Social Security account at ssa.gov. This account shows your year-by-year earnings history and estimates of what your benefits might be at different ages. You should check this record periodically to catch errors — if your employer reported earnings under the wrong name or number, you can request a correction, though you generally have only three years, three months, and 15 days from the end of the year in which the earnings were reported.

If you do not have internet access or prefer to request a paper copy, you can call the Social Security Administration at 1-800-772-1213 (TTY 1-800-325-0778) or visit a local Social Security office in person.

What happens to the money you pay

Social Security operates on a pay-as-you-go system. The taxes you pay today do not accumulate in an account with your name on it. Instead, they fund current benefits for people who are already retired, disabled, or survivors of workers who have died. When you retire, your benefits will be funded by the taxes paid by workers at that time.

The Social Security Trust Fund holds reserves to cover any shortfall between incoming taxes and outgoing benefits. As of 2024, the Old-Age and Survivors Insurance (OASI) Trust Fund and the Disability Insurance (DI) Trust Fund together hold reserves, though projections show the combined reserves will be depleted around 2034 if no changes are made to the law. After that point, incoming tax revenue would cover roughly 80% of scheduled benefits unless Congress acts.

Your payment record determines your benefit amount. The SSA calculates your Primary Insurance Amount (PIA) based on your highest 35 years of earnings, adjusted for inflation. The longer you work and the more you earn, the higher your eventual benefit will be.

Work credits and how they affect your benefits

Social Security uses a credit system to measure your work history. In 2024, you earn one credit for each $1,730 of wages or self-employment income, up to a maximum of four credits per year. You need 40 credits total to be may have access to to retirement benefits — this typically takes about 10 years of work.

For disability and survivor benefits, the requirement is lower and depends on your age when you become disabled or die. A worker in their 20s might need only six credits to be may have access to to disability benefits, while someone in their 60s would need more. The SSA website has a detailed chart showing credit requirements by age.

If you have not earned 40 credits, you will not be may have access to to your own retirement benefit. However, you may still be may have access to to benefits as a spouse, ex-spouse, or dependent of someone who has earned 40 credits.

Paying taxes if you work while receiving benefits

If you are under your full retirement age and receiving Social Security benefits, your benefits are reduced if your earnings exceed a yearly limit. In 2024, that limit is $23,400. For every $2 you earn above the limit, your benefits are reduced by $1. In the year you reach full retirement age, the limit is higher ($62,160 in 2024), and the reduction applies only to earnings before the month you reach full retirement age.

Once you reach your full retirement age, you can earn any amount without a reduction in benefits. You will still pay Social Security tax on those earnings if you are working, and those additional earnings may increase your future benefit amount if they are higher than some of your earlier years.

Medicare taxes (1.45% for employees, 2.9% for self-employed) continue regardless of your age or benefit status. Additionally, if your combined income (adjusted gross income plus nontaxable interest plus half your Social Security benefits) exceeds certain thresholds, a portion of your Social Security benefits becomes taxable income for federal tax purposes.

Self-employment tax and quarterly payments

If you are self-employed, you report your earnings on Schedule C (or Schedule F for farming) when you file your annual tax return. You calculate self-employment tax on Schedule SE, which determines how much you owe in both Social Security and Medicare taxes.

You can pay self-employment tax when you file your annual return, or you can make quarterly estimated tax payments if you expect to owe $1,000 or more. Quarterly payments are due on April 15, June 15, September 15, and January 15 of the following year. The IRS provides Form 1040-ES to help you calculate quarterly amounts.

Keep records of your business income and expenses. The IRS may request documentation, and accurate records help may support your Social Security earnings record is correct.

Correcting errors in your Social Security record

If you notice that your earnings were not reported or were reported incorrectly, contact the Social Security Administration as soon as possible. You will need documentation such as your tax return, W-2 forms, or pay stubs showing the correct earnings.

For wage earner errors, you have three years, three months, and 15 days from the end of the year in which the earnings were reported to request a correction. If your employer is no longer in business or cannot be located, the SSA may still correct the record if you provide sufficient evidence of the earnings.

For self-employment income, the process is similar. Bring copies of your tax returns and any business records that show the income. If the error is recent, correction is usually straightforward. Older errors may require more documentation.

Frequently Asked Questions

Can I see how much I have paid into Social Security?

Yes. Create a my Social Security account at ssa.gov to view your complete earnings record and see your year-by-year contributions. You can also request a paper statement by calling 1-800-772-1213 or visiting a local Social Security office.

What if I worked in another country — does that count toward Social Security?

Work in another country generally does not count toward U.S. Social Security unless that country has a totalization agreement with the United States. These agreements allow workers to combine credits from both countries. The SSA website lists countries with totalization agreements and explains how they work.

Do I pay Social Security tax on tips?

Yes. Tips are considered wages and are subject to Social Security tax. Your employer should include reported tips in your W-2 form and withhold Social Security tax accordingly. If you receive cash tips you did not report to your employer, you are still required to pay Social Security tax on them when you file your tax return.

What happens if I do not pay self-employment tax?

The IRS can assess penalties and interest on unpaid self-employment tax. Additionally, if you do not report your self-employment income, your Social Security earnings record will be incomplete, which could lower your future benefits. If you owe back taxes, contact the IRS to set up a payment plan.

Can I get a refund of Social Security taxes I paid?

Generally, no. Social Security taxes are not refundable. However, if your employer withheld Social Security tax in error — for example, if you earned above the yearly cap and were over-withheld — you can request a refund on your tax return or by contacting the IRS.