1. What is Social Security Tax?

Social Security tax is a payroll tax collected to fund the Social Security program. In 2022, the tax rate was 6.2% for employees (with employers matching another 6.2%) on income up to the wage base limit of $147,000.

2. How Does the Calculator Work?

The calculator uses the Social Security tax formula:

Where:

• \( Taxable\ Income \) — Earnings subject to Social Security tax
• \( Wage\ Base \) — Maximum taxable earnings ($147,000 in 2022)
• \( 6.2\% \) — Social Security tax rate for employees

Explanation: The tax is calculated on either your full income or the wage base limit, whichever is lower.

3. Importance of Social Security Tax

Details: Social Security taxes fund retirement, disability, and survivor benefits. Understanding your tax helps with financial planning and ensures proper withholding.

4. Using the Calculator

Tips: Enter your taxable income and the wage base (defaults to 2022 amount of $147,000). The calculator will determine your Social Security tax obligation.

5. Frequently Asked Questions (FAQ)

Q1: What was the 2022 wage base limit?
A: The wage base limit for 2022 was $147,000. Earnings above this amount were not subject to Social Security tax.

Q2: Is the employer portion included in this calculation?
A: No, this calculates only the employee's 6.2% portion. Employers pay an additional 6.2%.

Q3: Are self-employed individuals taxed differently?
A: Yes, self-employed individuals pay both employee and employer portions (12.4% total) but can deduct half on their tax return.

Q4: What types of income are subject to Social Security tax?
A: Wages, salaries, bonuses, and self-employment income are typically subject. Investment income is not.

Q5: How often does the wage base limit change?
A: The limit is adjusted annually based on national wage trends. It typically increases each year.