See Also
Key IRS Tax Forms and Publications for 2024 - NerdWalletUnderstanding Taxes - Theme 1: Your Role as a Taxpayer9 States With No Income TaxRegressive vs. Proportional vs. Progressive Taxes: What's the Difference?Press Office
How is Social Security financed?
Social Security is financed through a dedicated payroll tax. Employers and employees each pay 6.2 percent of wages up to the taxable maximum of $168,600 (in 2024), while the self-employed pay 12.4 percent.
Total income, including interest, to the combined OASI and DI Trust Funds amounted to $1.222 trillion in 2022. ($1.107 trillion from net payroll tax contributions, $49 billion from taxation of benefits, and $66 billion in interest)
The payroll tax rates are set by law, and for OASI and DI, apply to earnings up to a certain amount. This amount, called the contribution and benefit base, or taxable maximum, rises as average wages increase.
| Year | OASI | DI | OASDI |
|---|---|---|---|
| 2024 | 5.3 | 0.9 | 6.2 |
| SOURCE: 2023 OASDI Trustees Report | |||
