The Social Security tax rate is 6.2% of your wages, taken from your paycheck, plus your employer pays another 6.2% on your behalf

When you see "Social Security" or "OASDI" on your pay stub, that line shows 6.2% of your gross wages going to Social Security. Your employer contributes an equal 6.2%, but that money comes from the employer's side of the payroll ledger, not your pocket. Together, the employee and employer portions total 12.4% of your wages.

This rate has been the same since 1990. It applies to wages up to a cap that changes each year — in 2024, you stop paying Social Security tax on earnings above $168,600. Once you hit that cap in a given year, no more Social Security tax comes out of your remaining paychecks for that year. If you work for multiple employers, each one withholds 6.2% independently, which can mean you temporarily pay above the cap until you file your tax return and claim a credit.

Self-employed people pay both the employee and employer portions themselves: 12.4% total on net self-employment income, though they can deduct half of it as a business expense when calculating their adjusted gross income.

Key Takeaways

  • You pay 6.2% of your wages to Social Security, and your employer pays another 6.2% on your behalf.
  • The 6.2% rate applies only to wages below an annual cap, which was $168,600 in 2024 and changes each year.
  • If you work for multiple employers in the same year, you may temporarily pay Social Security tax above the cap, but you can claim a credit when you file your tax return.
  • Self-employed workers pay 12.4% total on net self-employment income, though they can deduct half of it as a business expense.

Why there is a wage cap

Social Security benefits are calculated based on your highest 35 years of earnings, but the formula replaces a higher percentage of lower wages than higher wages. Because of this structure, the program caps the amount of earnings it taxes and the amount it replaces in benefits. The cap exists to keep the tax rate from rising as wages grow faster than the program's trust fund.

The cap adjusts annually based on the national average wage. The Social Security Administration publishes the new cap each October for the following year. High earners hit the cap early in the year; lower-wage workers may never hit it at all.

What happens when you work for multiple employers

Each employer withholds 6.2% independently on the wages they pay you. If you earn $100,000 at one job and $100,000 at another, both employers will withhold Social Security tax on their full $100,000, even though your combined earnings exceed the annual cap. This means you will temporarily overpay Social Security tax during the year.

When you file your federal income tax return, you report all wages from all employers. The IRS calculates how much Social Security tax you should have paid based on the annual cap and issues you a credit for the overpayment. This credit appears on your tax return, either reducing the tax you owe or increasing your refund. You do not need to do anything special to claim it — the IRS catches it automatically when processing your return.

Self-employment and Social Security tax

If you are self-employed, you pay Social Security tax through the self-employment tax on Schedule SE of your tax return. You calculate net self-employment income (your business income minus business expenses), then pay 12.4% of that amount to Social Security, plus 2.9% to Medicare, for a combined self-employment tax of 15.3%.

The Social Security portion of self-employment tax is also subject to the annual wage cap. Once your net self-employment income reaches the cap, you stop paying the 12.4% Social Security portion but continue paying the 2.9% Medicare portion on all remaining income.

Self-employed workers can deduct half of their self-employment tax as an adjustment to income on their tax return. This deduction lowers your adjusted gross income and can reduce your overall tax burden, though it does not reduce the self-employment tax itself.

How the rate compares to Medicare tax

Social Security tax and Medicare tax are separate payroll taxes that appear on the same pay stub. Social Security is 6.2% (capped at $168,600 in 2024), while Medicare is 1.45% with no cap — you pay it on all wages no matter how high your income. Together, they make up what is called FICA tax.

High earners also pay an additional 0.9% Medicare tax on wages above $200,000 (single filers) or $250,000 (married filing jointly). This additional tax was introduced in 2013 and has no cap. It appears separately on your pay stub as "Additional Medicare Tax" or "Medicare Surtax."

When the rate might change

Congress sets the Social Security tax rate by law. The current 6.2% rate has been in place since 1990. The rate could only change if Congress passes new legislation. Various proposals have been discussed over the years — some suggest raising the rate, others suggest raising or eliminating the wage cap, and others propose different changes entirely — but no change has been enacted into law.

The Social Security trust fund is projected to be depleted around 2034 if no changes are made, at which point incoming tax revenue would cover only about 80% of scheduled benefits. This projection is why the rate is sometimes part of policy discussions, but it remains 6.2% until Congress acts.

Frequently Asked Questions

Why do I pay Social Security tax if I might not collect benefits?

Social Security tax funds current retirees' and disabled workers' benefits. You pay into the system throughout your working years, and when you retire or become disabled, the system pays you based on your earnings record. The tax is mandatory for all wage earners and self-employed workers, regardless of whether you expect to collect.

Can I opt out of paying Social Security tax?

No. Social Security tax is mandatory for all employees and self-employed workers. The only exceptions are certain government employees hired before specific dates and some religious groups that have received an exemption from the IRS, but these are rare and require formal approval.

Does Social Security tax come out before or after income tax?

Social Security tax is withheld from your gross wages before federal income tax is calculated. Both are taken from your paycheck, but Social Security is computed first. This means your federal income tax is calculated on your gross wages minus pre-tax deductions like health insurance and retirement contributions, but not minus Social Security tax.

What if I earn over the wage cap — do I lose money?

Earning over the wage cap does not mean you lose money. You straightforward stop paying Social Security tax once you hit the cap in a given year. Your Social Security benefit is also calculated using the capped formula, so high earners do not receive proportionally higher benefits for earnings above the cap. The cap applies equally to both the tax side and the benefit side.

How do I know what the wage cap is for this year?

The Social Security Administration publishes the annual wage cap on its website (ssa.gov) each October for the following year. Your employer also knows the cap and uses it to stop withholding Social Security tax once you reach it. You can find the current and historical caps on the SSA's "Contribution and Benefit Base" page.