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 $147,000 in 2022, while the self-employed pay 12.4 percent.
In 2021, total income to the Old-Age, Survivors and Disability Insurance (OASDI) trust fund was just under $1.1 trillion. This income came from three primary sources: payroll tax $980 billion (90%), interest on trust fund assets $70 billion (6.5%) and OASDI benefit taxation $38 billion (3.5%). The trust fund assets at the end of 2020 totaled slightly less than $2.9 trillion.
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%
Trust Fund Data:
Government Relations and Policy April 2022