En español | Social Security taxes in 2020 are 6.2 percent of gross wages up to $137,700. (Thus, the most an individual employee can pay this year is $8,537.40.) Most workers pay their share through FICA (Federal Insurance Contributions Act) taxes withheld from their paychecks. The contributions are matched by their employers.
People who are self-employed cover both shares — that is, 12.4 percent of their net earnings — in the form of SECA (Self-Employment Contributions Act) taxes, paid through federal tax returns. Their higher burden is partially offset by a law that allows them to take half of what they pay in Social Security taxes as an income tax deduction.
Keep in mind
- Another 1.45 percent of your gross wages helps fund Medicare. There’s no income maximum there; $1.45 of every $100 you earn goes to Medicare. Again, your employer matches that, and again, people who work for themselves pay both shares, or 2.9 percent of their net income from self-employment.
Updated March 25, 2020