What Percentage Is the Social Security Tax?

The Social Security tax is designed to collect money from the current generation of workers to pay for the current retirement benefits. Income taxes are not used to pay for Social Security benefits. The tax rate you pay depends if you are self-employed or if you work for an employer.

Total Social Security Tax

The Social Security tax rate is 12.4 percent for the tax year 2009. This tax is only applied to the first $106,800 you make.

Employer Contributions

If you work for an employer, the employer must pay 6.2 percent and the employee must pay 6.2 percent.

Self-Employed Workers

Self-employed workers are responsible for the entire 12.4% of the social security tax.

Medicare Tax

The Medicare tax is closely linked to the Social Security tax in that it is only on the first $106,800 for 2009, and the tax is split between employer and employee.

Medicare Tax Rate

The Medicare tax rate for 2009 is 2.9 percent, meaning if a person is employed by a company, 1.45 percent is paid by each. If a person is self-employed, he must pay the entire 2.9 percent.

References

• Social Security Tax Rates