When Do You Have to Start Paying Social Security Tax?
Social Security tax is part of taxes that employers are required by law to withhold from employees' monthly wages. Most payroll taxes are used to help the federal government fund programs that help American citizens in need with their living expenses and medical costs. Social Security taxes are mainly used to pay for benefits administered by the Social Security office, such as retirement and disability benefits.
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When You Pay Social Security Tax
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Social Security tax is withheld from your monthly paycheck by your employer. Any person who works in the United States -- either a U.S. citizen, a permanent resident or a legal admitted non-citizen -- is required to pay Social Security tax. Even if you never expect to receive Social Security benefits, you are still required to pay them. You have to start paying Social Security tax (and Medicare tax) as soon as you start legally working in the United States. The age at which you start legally working may vary from state to state and according to federal rules.
Legal Working Age
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The U.S. Department of Labor states that 14 is the legal minimum employment age. People under 16 years old can only work a limited number of hours per week and can only perform some types of work. Young people cannot work in jobs that are declared hazardous by the secretary of labor. However, some types of jobs, such as babysitting, do not require a minimum age. If you are 14 years old or older and you are legally working, you are also required to pay Social Security tax.
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Social Security Tax Rate
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The 2011 Social Security tax rate has changed from the 2010 rate. As of 2011, the Social Security tax rate is 4.2 percent of an employee's wage for employees and 6.2 percent of an employee's wage for employers. Employers must pay Social Security tax for each employee. The base wage for 2011 is $106,800. This means that Social Security tax is only applied to the first $106,800 of an individual´s income. Income that exceeds this amount is not taxable for Social Security tax purposes.
Other Taxes
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When you start legally working, you are not only required to pay Social Security tax but also Medicare tax and income tax if it applies to your income level. (People who make less than a specific amount per year do not pay income tax.) You might also be required to pay some state taxes. To know the taxes you must pay when you start working, contact your state tax department. To know more about federal taxes, you can go to the IRS website.
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