Social Security tax (US)
The 6.2% US payroll tax that funds Social Security retirement and disability — capped at the annual wage base.
Social Security tax (OASDI — Old Age, Survivors, and Disability Insurance) is one of the two US payroll taxes bundled under FICA. Employees pay 6.2% on wages up to the annual wage base ($176,100 for 2025); employers match the same 6.2%. Wages above the wage base are NOT subject to Social Security tax — this is the only US payroll tax with a cap.
The cap means high earners pay a smaller proportion of total income in Social Security tax than middle earners do. A worker on $80,000 pays the full 6.2% on every dollar. A worker on $300,000 pays 6.2% on the first $176,100 and 0% on the rest, so their effective Social Security rate is about 3.6%.
Social Security tax is collected by the IRS but funds the dedicated Social Security Trust Fund — distinct from general federal income tax. It applies to W-2 employee wages and to self-employment earnings (where the individual pays both halves under SECA).
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See also
- FICA (Social Security + Medicare) — The US payroll tax that funds Social Security and Medicare — flat-rate, applies before federal income tax.
- Medicare tax (US) — The 1.45% US payroll tax that funds Medicare — no wage cap, plus a 0.9% additional surcharge above $200,000.
- Social Security wage base (US FICA cap) — The annual ceiling above which the 6.2% Social Security portion of FICA stops applying — $176,100 (2025).
- Standard deduction (US federal) — The flat amount subtracted from gross income before federal-income-tax brackets apply — $15,000 single (2025).