How to Calculate Social Security Tax Withheld
The Social Security tax is a federal payroll tax imposed on earned income. Earned income includes money paid to you for your work, such as your salary or an end-of-year bonus. You do not have to pay Social Security taxes on unearned income such as dividends. The Social Security tax rate is subject to change, but does not change on a regular basis. To calculate the Social Security tax withheld, you need to know the current tax rate and how much you made.
Other People Are Reading
Instructions
-
-
1
Look up the current Social Security tax rate and the income limit for the tax on the Social Security Administration's website. As of 2010, the rate is 12.4 percent and it only applies to the first $106,800 you earn.
-
2
Consult your earnings records to see if you have already earned more than the income limit. For example, if in 2010 you had already earned over $106,800, you would not have any Social Security tax withheld.
-
-
3
Divide the Social Security tax rate by two to find the rate that employees pay. The Social Security tax is split evenly between employers and employees. If you were self-employed, you would have to pay the entire amount. For 2010, you would divide 12.4 percent by 2 to find the employee rate of 6.2 percent.
-
4
Multiply your paycheck by the employee Social Security tax rate to find the Social Security tax withheld. For example, if in 2010 you had a paycheck of $3,000, you would multiply $3,000 by 0.062 to find that $186 would be withheld for the Social Security tax.
-
1
References
Resources
- Photo Credit old man outdoors image by buckwheat from Fotolia.com
