What you pay into Social Security and how much it changes each year

In 2025, you pay 6.2% of your wages into Social Security, and your employer pays another 6.2% on your behalf — for a total of 12.4%. This rate has stayed the same since 1990. The change that happens every year is the wage base limit, which is the maximum amount of your income that gets taxed. For 2025, that limit is $168,600. Anything you earn above that amount is not subject to Social Security tax.

The wage base limit rises each year based on average wage growth in the country. In 2024 it was $168,600, so it stayed the same for 2025. If you earn $168,600 or less, you pay Social Security tax on all of it. If you earn $200,000, you pay the tax only on the first $168,600 and nothing on the remaining $39,400.

Self-employed people pay both the employee and employer portions — 12.4% total — on net earnings from self-employment, though you can deduct half of that tax when you file your income tax return.

Key Takeaways

  • The Social Security tax rate is 6.2% for employees and 6.2% for employers in 2025, unchanged since 1990.
  • The wage base limit for 2025 is $168,600, meaning you pay tax only on income up to that amount.
  • Self-employed workers pay 12.4% total but can deduct half of it on their tax return.
  • The wage base limit changes yearly based on national wage growth, so the amount you pay can increase even if the tax rate does not.
  • Social Security tax appears as "OASDI" on your pay stub and funds retirement, disability, and survivor benefits.

Where Social Security tax appears on your paycheck

On your pay stub, Social Security tax shows up as a line item labeled OASDI (Old-Age, Survivors, and Disability Insurance). This is the formal name for the Social Security program. Your employer withholds 6.2% of your gross pay up to the wage base limit and sends it to the Social Security Administration on your behalf.

If you work for multiple employers in the same year, each one withholds Social Security tax independently. This means if you earn $168,600 at one job and then switch to another job and earn another $50,000, you will have paid Social Security tax on $218,600 total — more than the limit. When you file your tax return, you can claim a refund for the overpayment. The IRS will refund the excess tax you paid above the wage base limit.

Medicare tax, which funds Medicare benefits, is separate and appears as a different line on your pay stub. It is 1.45% for employees and 1.45% for employers, with no wage limit — you pay it on all earnings.

How the wage base limit affects what you owe

The wage base limit is the most important number for high earners. If you make $150,000 a year, you pay 6.2% on all of it. If you make $200,000 a year, you pay 6.2% only on the first $168,600 — that is $10,453.20 — and nothing on the remaining $31,400. The higher your income above the limit, the lower your effective Social Security tax rate.

The limit changes because Congress designed it to cover roughly 90% of all wages earned in the country. As average wages rise, the limit rises with them. Between 2024 and 2025, the limit did not change, but in years when it does increase, your Social Security tax bill can go up even if your pay stays the same. For example, if you earned $168,600 in 2024 and earn the same amount in 2026, but the limit rises to $170,000, you would owe tax on an additional $1,400.

Self-employed workers and Social Security tax

If you are self-employed, you pay both sides of the Social Security tax — the employee portion and the employer portion — for a total of 12.4%. You calculate this on Schedule SE (Self-Employment Tax), which you file with your Form 1040. The calculation is based on your net self-employment income, which is your business income minus business expenses.

You do not pay Social Security tax on your entire net income. First, you multiply your net self-employment income by 92.35%, then explore the 12.4% rate. This 92.35% figure accounts for the fact that self-employed people do not pay tax on the employer portion of their own tax — a rough equivalent to what an employee gets.

When you file your tax return, you can deduct half of your self-employment tax as an adjustment to income. This means if you owe $5,000 in self-employment tax, you can deduct $2,500 from your taxable income. This deduction lowers your income tax bill but does not reduce the Social Security tax itself.

What happens if you earn over the wage base limit

High earners pay a smaller percentage of their total income in Social Security tax because of the wage base limit. A person earning $168,600 pays $10,453.20 in Social Security tax. A person earning $336,000 pays $10,453.20 as well — the same amount — because the tax stops at $168,600. This is by design: Social Security benefits are capped, so the program only taxes income up to a certain level.

If you work multiple jobs and cross the wage base limit across all employers combined, you will overpay. For example, if you earn $100,000 at Job A and $80,000 at Job B, you will have paid Social Security tax on $180,000 total, even though the limit is $168,600. You overpaid by $12,000 × 6.2% = $744. You claim this refund on your Form 1040 by entering the overpayment on line 24 (or the applicable line for your tax year). The IRS will refund the excess.

How Social Security tax connects to your future benefits

Social Security tax funds three programs: retirement benefits, disability benefits (SSDI), and survivor benefits for families of deceased workers. Your Social Security statement, which you can view at ssa.gov, shows your earnings history and estimates your future benefits based on your current contributions.

The amount you receive in retirement is based on your highest 35 years of earnings, adjusted for inflation. Years you did not work count as zero, which lowers your average. The more you earn (up to the wage base limit) and the longer you work, the higher your future benefit. If you have not worked 35 years, your benefit will be lower than someone who has.

You do not get a refund of your Social Security tax if you die before retirement age, but your family may receive survivor benefits. If you become disabled before retirement age, you may receive disability benefits. These programs are funded by the same 12.4% tax (6.2% employee, 6.2% employer) that funds retirement.

Changes to watch for in future years

The wage base limit changes annually, usually in October or November when the Social Security Administration announces the new figure for the following year. The 2025 limit of $168,600 applies to wages earned in 2025. When you file your 2025 tax return in 2026, you will use this limit to check for overpayment.

The Social Security tax rate itself has not changed since 1990 and requires an act of Congress to change. However, Congress has periodically discussed raising the wage base limit or the tax rate as a way to shore up Social Security's long-term finances. Any change would be announced well in advance and would not affect current-year taxes retroactively.

Frequently Asked Questions

Do I pay Social Security tax on tips and bonuses?

Yes. Tips and bonuses are wages and subject to the same 6.2% Social Security tax as regular pay, up to the wage base limit. Your employer should include them in your gross wages on your pay stub.

What if I work part-time and do not earn $168,600?

You pay 6.2% on whatever you earn, regardless of the wage base limit. The limit only matters if you earn more than it. If you earn $50,000, you pay tax on all $50,000.

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 government employees hired before specific dates who are covered by their own pension system instead.

If I work in two states, do I pay Social Security tax twice?

No. Social Security tax is federal, not state-based. You pay it once based on your total earnings across all employers and states. If you overpay across multiple jobs, you claim the refund on your federal tax return.

Does Social Security tax explore to retirement account contributions?

Yes. Contributions to a 401(k), 403(b), or similar plan are subject to Social Security tax. They are not subject to income tax, but they are subject to Social Security and Medicare tax. Only contributions to a traditional IRA are not subject to Social Security tax.