What Social Security tax is and why it comes out of your paycheck

Social Security tax is a federal payroll tax that funds the Social Security program. It comes out of your paycheck automatically, and your employer contributes an equal amount on your behalf. The money goes into a trust fund that pays benefits to retirees, disabled workers, and survivors of workers who have died.

You will see this tax listed on your pay stub as "FICA" (Federal Insurance Contributions Act) or sometimes as "Social Security" or "OASDI" (Old-Age, Survivors, and Disability Insurance). It is separate from Medicare tax, which is the other part of FICA.

The amount you pay is a percentage of your gross wages — the money you earn before taxes and deductions. This percentage is set by federal law and changes only when Congress votes to change it. Your employer withholds the tax and sends it to the U.S. Treasury on your behalf.

Key Takeaways

  • Social Security tax is 6.2 percent of your wages, withheld from your paycheck, with your employer paying an equal 6.2 percent.
  • Self-employed workers pay both the employee and employer portions, totaling 12.4 percent of their net business income.
  • There is a wage cap — you only pay Social Security tax on income up to a certain amount each year, which Congress adjusts annually.
  • The tax funds current benefits for retirees, disabled workers, and families of deceased workers, not a personal account in your name.
  • You can view your estimated Social Security benefits and tax history on your Social Security account at ssa.gov.

How much Social Security tax you pay

The current Social Security tax rate is 6.2 percent of your wages. If you earn $1,000 in a week, your employer withholds $62 for Social Security tax. Your employer also pays $62 into the system on your behalf, but that amount does not reduce your wages — it is a separate employer cost.

There is a wage cap, which means you only pay Social Security tax on income up to a certain amount each year. Once you reach that cap, no more Social Security tax is withheld from your remaining paychecks for that year. The cap amount changes every year because Congress indexes it to wage growth. For example, the cap was $160,200 in 2023 and $168,600 in 2024, but you should check the current year's cap on the Social Security Administration website.

If you change jobs during the year, you may pay Social Security tax to multiple employers, but you will not overpay overall. When you file your tax return, you can claim a credit for any excess Social Security tax withheld.

How self-employed workers pay 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, for a total of 12.4 percent. This is called self-employment tax. You calculate it on your net business income — your revenue minus business expenses — not on your gross revenue.

You pay self-employment tax when you file your annual tax return using Schedule SE. You can deduct half of your self-employment tax as a business expense on your tax return, which reduces your taxable income. The wage cap applies to self-employed workers as well, so once your net business income reaches the annual cap, you stop paying the tax on additional income.

Where Social Security tax money goes

Social Security tax does not go into a personal account with your name on it. Instead, it goes into the Social Security Trust Fund, which is a pool of money managed by the Social Security Administration. The government uses this money to pay benefits to people who are currently receiving Social Security.

The program has three main benefit categories. Retirement benefits go to workers who reach their full retirement age (which varies based on birth year, typically between 66 and 67). Disability benefits go to workers under retirement age who have a medical condition that prevents them from working. Survivor benefits go to the family members of a worker who has died, including a spouse and dependent children.

The trust fund operates on a pay-as-you-go basis: the taxes paid by current workers fund the benefits paid to current beneficiaries. This is why the program is sometimes described as intergenerational — younger workers' taxes support older retirees' benefits.

How to check your Social Security tax record

The Social Security Administration keeps a record of how much you have paid in Social Security tax over your lifetime. You can view this record by creating an account at ssa.gov. Once you log in, you can see your earnings history year by year and an estimate of your future retirement, disability, and survivor benefits.

It is a good idea to check your record every few years to make sure your employer reported your wages correctly. If you spot an error — such as wages that were not reported or were reported under the wrong name or Social Security number — you should contact Social Security right away. Errors can affect your benefit amount later.

You can also request a paper statement by mail if you do not have internet access. Visit ssa.gov or call 1-800-772-1213 to request one.

What happens to Social Security tax if you leave the United States

If you move to another country, you continue to pay Social Security tax on U.S. wages if you are still working for a U.S. employer. The tax is still withheld from your paycheck the same way.

Your ability to receive Social Security benefits later depends on your citizenship and the country where you live. U.S. citizens can receive benefits anywhere in the world. Non-citizens have more restrictions — some countries have agreements with the United States that allow their citizens to receive benefits, but others do not. If you are not a U.S. citizen and plan to move abroad, contact Social Security before you leave to understand how it affects your future benefits.

The difference between Social Security tax and income tax

Social Security tax and federal income tax are two separate withholdings on your paycheck. Social Security tax is a flat 6.2 percent (up to the wage cap) and funds the Social Security program specifically. Federal income tax is calculated based on your tax bracket and filing status and funds general government operations.

You will see both listed separately on your pay stub. Medicare tax (1.45 percent) is also withheld separately and funds the Medicare health insurance program. Together, Social Security tax and Medicare tax make up FICA.

Frequently Asked Questions

Can I opt out of paying Social Security tax?

No. Social Security tax is mandatory for all employees and self-employed workers. The only exception is certain religious groups that have been granted an exemption by the IRS, and even then, the exemption requires specific conditions and IRS approval.

What if my employer did not withhold Social Security tax?

Contact your employer and ask them to correct the error. If they refuse or go out of business, contact the Social Security Administration at 1-800-772-1213. Social Security can investigate and may be able to credit the missing wages to your record.

Do I pay Social Security tax on tips?

Yes. Tips are considered wages and are subject to Social Security tax. Your employer should withhold the tax from your regular paycheck or from the tips you report. If you receive cash tips that were not reported to your employer, you should report them on your tax return.

Will I get back the Social Security tax I paid?

Not directly. The tax you pay funds current benefits for others, and your future benefits will be funded by taxes paid by future workers. You do not get a refund of the tax itself, but you may receive Social Security benefits later if you meet the program's requirements.

How much Social Security benefit will I receive based on what I paid in taxes?

Your benefit amount depends on your earnings history, your age when you start benefits, and your life expectancy — not on a straightforward return of what you paid. You can see an estimate of your future benefit on your Social Security account at ssa.gov, but the actual amount will depend on when you choose to start benefits.