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 $176,100 in 2025, while the self-employed pay 12.4 percent.

In 2023, total income to the Old-Age, Survivors and Disability Insurance (OASDI) trust fund was just over $1.35 trillion. This income came from three primary sources: payroll tax $1.23 billion (91%), interest on trust fund assets $66.9 billion (5%) and OASDI benefit taxation $50.7 billion (3.8%).  The trust fund assets at the end of 2023 totaled slightly less than $2.8 trillion.

Also in 2023, the Social Security Administration paid a total of just under $1.4 trillion in benefits to 67 million Americans, at an administrative cost of about $14 billion.

The payroll tax rates are set by law and apply to earnings up to the taxable maximum. This amount, called the earnings base, rises as average wages increase.  The following table reflects the portion of the tax rate that is dedicated to the OASI and the DI Trust Funds.

Share of the Tax Rate for Each Trust Fund                                 

Year                                                   OASI                    DI                         OASDI

2016 through 2018                         5.015                    1.185                    6.2%

2019 and later                                  5.30                     0.90                     6.2%

 

SOURCE:

Trust Fund Data:                                          

https://www.ssa.gov/oact/STATS/table4a3.html

https://www.ssa.gov/oact/progdata/oasdiRates.html

https://www.ssa.gov/oact/STATS/OASDIbenies.html

 

 

Government Relations and Policy October 2024