Social Security Tax
A 6.2% payroll tax on wages up to the annual wage base ($176,100 in 2025), matched by your employer. Funds Social Security retirement, disability, and survivor benefits.
Social Security tax is the larger component of FICA, charged at 6.2% of wages up to the annual wage base limit. For 2025, the wage base is $176,100, meaning the maximum employee Social Security tax is $10,918.20. Income above the wage base is not subject to this tax.
Your employer matches the 6.2%, so a total of 12.4% of your wages goes toward Social Security. Self-employed individuals pay the full 12.4% through self-employment tax, though they deduct half as a business expense.
The Social Security wage base is adjusted annually for inflation based on the national average wage index. Your Social Security benefits in retirement are calculated using your highest 35 years of earnings (adjusted for inflation), so paying into the system for more years and at higher amounts generally increases your future benefits.
Related Terms
FICA
Federal Insurance Contributions Act taxes that fund Social Security (6.2%) and Medicare (1.45%). Both employees and employers pay FICA, totaling 15.3% on wages.
Medicare Tax
A 1.45% payroll tax on all wages with no income cap, matched by employers. High earners pay an Additional Medicare Tax of 0.9% on wages over $200,000 (single).
Wage Base
The maximum amount of earnings subject to Social Security tax in a given year. For 2025, the wage base is $176,100. Earnings above this amount are exempt from Social Security tax.
Self-Employment Tax
The combined Social Security (12.4%) and Medicare (2.9%) tax paid by self-employed individuals — effectively both the employee and employer shares of FICA, totaling 15.3%.