Font Size
    • Share to Facebook
    • Twitter
    • Email
    • Print
How Social Security is Financed

Social Security is financed through a dedicated payroll tax. Employers and employees each pay 6.2 percent of wages up to the taxable maximum of $117,000 (in 2014), while the self-employed pay 12.4 percent.

In 2012, $590 billion (70 percent) of total OASI and DI income came from payroll taxes. The remainder was provided by interest earnings ($109 billion or 13 percent) and revenue from taxation of OASDI benefits ($27 billion or 3 percent), and $114 billion in reimbursements from the General Fund of the Treasury - almost exclusively resulting from the 2012 payroll tax legislation.

The payroll tax rates are set by law and for OASI and DI apply to earnings up to a certain amount. This amount, called the earnings base, rises as average wages increase.

Tax rates for employees and employers each under current law

Year

OASI

DI

OASDI

2000 and later

5.30

0.90

6.20

SOURCE: 2013 OASDI Trustees Report.



Subscribe e-Alerts
  Email Address:  
 
  First Name:  
  Last Name:  
   
 
Submit

Read Our Blog

Congress Goes Home Leaving Social Security Administration Without a Director – Again

Let’s take quick stock of what this lame duck Congressional session has meant for middle-class Americans, especially seniors and their families: ... ...

Read More

 

Medicare's Top 10
     

 

Copyright © 2014 by NCPSSM
Login  |