1. What is Social Security Tax?

Social Security tax is a payroll tax collected to fund the Social Security program in the United States. It's part of FICA (Federal Insurance Contributions Act) taxes and is levied on both employees and employers.

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 earnings subject to tax ($160,200 in 2023)
• \( 6.2\% \) — Social Security tax rate for employees

Explanation: The tax is calculated on earnings up to the wage base limit. Income above this limit is not taxed for Social Security.

3. Importance of Social Security Tax

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

4. Using the Calculator

Tips: Enter your taxable income and the current wage base (pre-filled with 2023 value). The calculator will determine your Social Security tax liability.

5. Frequently Asked Questions (FAQ)

Q1: What's the current Social Security tax rate?
A: The employee rate is 6.2% (employers pay an additional 6.2%). Self-employed individuals pay the full 12.4%.

Q2: How often does the wage base change?
A: The wage base typically increases annually based on national average wage increases.

Q3: Are all types of income subject to Social Security tax?
A: No, only earned income (wages, salaries, self-employment income). Investment income is not subject.

Q4: What if I have multiple jobs?
A: Each employer will withhold Social Security tax up to the wage base. You may need to file for a refund if over-withheld.

Q5: Is there a minimum income threshold?
A: No, all earned income is subject to Social Security tax from the first dollar, up to the wage base limit.