The Social Security tax rate is 6.2% for employees and 6.2% for employers, for a combined 12.4% on every dollar of covered wages up to an annual cap. Self-employed workers pay the full 12.4% themselves. In 2026, the cap is $184,500, so the most an employee will contribute for the year is $11,439.
How the 6.2% Splits Between You and Your Employer
Social Security taxes are collected under the Federal Insurance Contributions Act (FICA). The law splits the obligation evenly: workers pay 6.2% of gross wages, and employers pay a matching 6.2% on the same wages. Both halves fund retirement, survivor, and disability benefits through the Social Security Administration.
The employee rate comes from 26 U.S.C. § 3101, which imposes a 6.2% tax on wages.1Office of the Law Revision Counsel. 26 USC 3101 – Rate of Tax The employer rate sits in § 3111, which imposes the same 6.2% as an excise tax on the employer.2Office of the Law Revision Counsel. 26 USC 3111 – Rate of Tax On a $60,000 salary, you pay $3,720 and your employer pays another $3,720, sending a combined $7,440 into Social Security for the year.
You don’t have to do anything to make this happen. Payroll withholds your share from each paycheck and remits both halves to the IRS.
Social Security Tax vs. the Full FICA Line on Your Pay Stub
Your pay stub probably shows a single “FICA” deduction, but that line actually contains two separate taxes. Social Security accounts for 6.2%, and Medicare adds another 1.45%, bringing total employee withholding to 7.65% of gross wages. The employer pays the same combined 7.65%, so the full FICA burden on any dollar of wages is 15.3%.3Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates
One key difference: Social Security tax stops once your earnings hit the annual wage base, but Medicare tax has no cap. Every dollar you earn, no matter how high your income, is subject to the 1.45% Medicare tax. High earners face an additional 0.9% Medicare surtax on earnings above $200,000 for single filers or $250,000 for married couples filing jointly.4Internal Revenue Service. Questions and Answers for the Additional Medicare Tax That surtax is paid only by the employee; the employer does not match it.
The Self-Employed Rate: 12.4%
If you work for yourself as a freelancer, independent contractor, or business owner, nobody is splitting the tax with you. The Self-Employment Contributions Act imposes the full 12.4% Social Security tax, plus 2.9% Medicare, on your net earnings.5Office of the Law Revision Counsel. 26 USC 1401 – Rate of Tax The combined self-employment tax rate is 15.3%, mirroring the total employer-plus-employee FICA rate.
The 92.35% Multiplier
The rate doesn’t hit every dollar of your net profit. Before applying the 15.3%, you multiply your net self-employment earnings by 92.35%. This adjustment exists because traditional employees effectively get half their FICA paid by their employer, reducing the base on which they’re taxed. The 92.35% figure is 100% minus 7.65% (the employer-equivalent share). If your Schedule C shows $80,000 in net profit, self-employment tax is calculated on $73,880 ($80,000 × 0.9235), not on the full $80,000.
Deducting Half of the Tax
The tax code softens the blow a second way. You can deduct half of your self-employment tax as an adjustment to gross income on Form 1040, whether or not you itemize.6Office of the Law Revision Counsel. 26 USC 164 – Taxes This doesn’t reduce the self-employment tax itself, but it lowers the income on which you owe regular federal income tax. Calculate your total self-employment tax on Schedule SE, then enter exactly half of that amount on Schedule 1.
The 2026 Wage Base and Your Maximum Contribution
Social Security tax doesn’t apply to every dollar you earn. A cap called the taxable wage base limits how much of your income is subject to the 6.2% (or 12.4% for self-employed) rate. For 2026, that ceiling is $184,500.7Social Security Administration. Contribution and Benefit Base Once your cumulative earnings for the year cross that line, Social Security withholding stops for the rest of the year.
At the 2026 base, the maximum an employee pays in Social Security tax is $11,439 ($184,500 × 6.2%). The employer pays the same $11,439, for a combined maximum of $22,878 per worker.7Social Security Administration. Contribution and Benefit Base Someone earning $250,000 would see Social Security withholding disappear from their paychecks partway through the year once cumulative wages hit $184,500. The remaining $65,500 is free of Social Security tax, though Medicare tax continues on every dollar.
The Social Security Administration adjusts the wage base annually based on changes in the national average wage index. In practice, the cap tends to rise most years. It was $168,600 in 2024 and $176,100 in 2025.7Social Security Administration. Contribution and Benefit Base The cap also limits the earnings that count toward your eventual benefit calculation, which keeps benefits roughly proportional to contributions.
What Kinds of Pay the Rate Applies To
Most compensation for work is subject to Social Security tax: base salary, hourly wages, bonuses, and commissions. Tips also count if they total $20 or more in a calendar month from a single employer.8Internal Revenue Service. Tip Recordkeeping and Reporting
Certain pre-tax payroll deductions can reduce the wages subject to Social Security tax. Contributions to a health savings account made through a Section 125 cafeteria plan come out of your pay before FICA is calculated, lowering both your taxable wages and your employer’s share. Not every pre-tax deduction works this way. Traditional 401(k) contributions reduce your income for federal income tax purposes but are still subject to Social Security and Medicare tax.
Investment income sits in a completely different category. Dividends, capital gains, and interest from savings accounts are not wages and do not trigger Social Security tax. The same goes for rental income in most situations. That matters for retirees and people with substantial passive income: that money never flows through the FICA system regardless of how large it is.
If You Work Two Jobs and Overpay
Work two or more jobs in the same year and each employer withholds Social Security tax independently based only on what they pay you. Neither employer knows about the other, so their combined withholding can exceed the annual maximum. When that happens, you can claim the excess as a credit on your federal income tax return.9Internal Revenue Service. Topic No. 608, Excess Social Security and RRTA Tax Withheld
The process is different when a single employer overwithholds. In that case, you can’t claim the credit on your tax return. Instead, the employer should correct the error directly. If they refuse or fail to do so, you can file Form 843 (Claim for Refund and Request for Abatement) with the IRS, attaching copies of your W-2s for the year.9Internal Revenue Service. Topic No. 608, Excess Social Security and RRTA Tax Withheld If you’re filing a joint return, each spouse must calculate any excess separately.
Who Is Exempt From the Tax
Very few people qualify for a full exemption. Members of certain religious groups can apply using IRS Form 4029 if their sect has existed continuously since December 31, 1950, is conscientiously opposed to accepting insurance benefits (including Social Security, Medicare, and private insurance), and provides for its dependent members’ needs. Approval means you’ll never pay into Social Security, but you also permanently waive all rights to Social Security and Medicare benefits.
Some categories of government employees hired before certain dates may also fall outside the Social Security system if they participate in a separate public retirement plan. Rules vary by state and by the specific plan involved. Students employed by the university where they’re enrolled, and certain nonresident aliens, may also be exempt in specific circumstances.