Everyone Doesn’t Pay the Same to Support Social Security

Everyone is aware that their employer withholds taxes from each paycheck to help fund Social Security. What you may not know is that every American doesn’t pay the same percentage of their income to support Social Security.

Generally, employers withhold 6.2% of wages to help fund Social Security. Employers are further required to match the 6.2%. This means that a total of 12.4% of an employees wages is contributed to Social Security; however, only half of that amount comes directly from employees pay.

There is a cap on the dollars earned that can be taxed for Social Security. In 2017, once someone earns $127,200 their wages are no longer taxed to help fund Social Security. In other words, if a person makes one million dollars, they will pay 6.2% on the first $127,200. They will pay no Social Security taxes on the remaining $872,800.

Here is a page from the IRS that discusses payroll taxes.

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