How much comes out of your paycheck for Social Security and Medicare
If you are working, your employer takes 6.2% of your gross pay for Social Security and 1.45% for Medicare. That is 7.65% total. Your employer also pays an equal amount on your behalf — you do not see that money, but it counts toward your benefits. If you are self-employed, you pay both the employee and employer share, which comes to 15.3% of your net earnings.
These percentages have been the same since 1992 for Medicare and since 1990 for Social Security. They do not change based on your age or income level, though Social Security tax stops once you reach the wage base limit — in 2024, that limit is $168,600. Medicare tax has no wage limit and continues on all earnings above that threshold.
The money you pay in is not held in an account with your name on it. Instead, it goes into a general fund that pays current beneficiaries. Your own benefits later are based on how much you paid in over your working years, not on how much sits in a personal account.
Key Takeaways
- Social Security takes 6.2% of your paycheck and Medicare takes 1.45%, for a total of 7.65% in combined taxes.
- Your employer pays an equal amount on your behalf, though you do not see this deduction on your stub.
- Self-employed workers pay both shares, totaling 15.3% of net earnings.
- Social Security tax stops once you earn above the annual wage base limit, but Medicare tax continues on all income.
- These taxes fund current benefits for retirees and disabled workers, not a personal savings account in your name.
Understanding the Social Security wage base limit
Social Security tax only applies to earnings up to a certain amount each year. In 2024, that limit is $168,600. If you earn $200,000, you pay Social Security tax only on the first $168,600 of that income. The remaining $31,400 is not subject to Social Security tax, though it is still subject to Medicare tax.
This limit changes each year based on average wage growth in the country. It typically increases by a small percentage annually. High-income earners pay the same 6.2% rate as everyone else, but they pay it on a smaller portion of their total income, which means they pay a lower percentage of their overall earnings into the system.
Medicare tax, by contrast, has no wage base limit. You pay 1.45% on every dollar you earn, no matter how much that is. High earners also pay an additional 0.9% Medicare tax on earnings above $200,000 (or $250,000 if married filing jointly), which began in 2013.
What happens to the money you pay in
The Social Security Administration and Centers for Medicare & Medicaid Services do not set aside your payments for your future use. Instead, current workers' taxes pay for current retirees' benefits. When you retire, your benefits come from taxes paid by people working at that time.
This is called a pay-as-you-go system. It works as long as there are enough workers paying in to cover the benefits going out. In recent years, the ratio of workers to beneficiaries has shifted — there are fewer workers per retiree than there were decades ago — which is why you may hear concerns about the long-term solvency of these programs.
Your earnings record is tracked by the Social Security Administration. The amount you paid in, combined with how long you worked, determines your benefit amount when you reach retirement age. Medicare benefits work similarly — your payment history affects your premiums and coverage options, though Medicare is available to nearly all people age 65 and older regardless of work history.
How to see what you have paid in
You can view your Social Security earnings record and estimated benefits on the Social Security Administration website at ssa.gov. Create a my Social Security account to see your complete work history, the amount of taxes you have paid, and a projection of your retirement benefit at different ages.
For Medicare, you can log into Medicare.gov with your Medicare account to see your payment history and current coverage. If you do not have an online account, you can call Social Security at 1-800-772-1213 to request a printed statement of your earnings record.
Checking these records is useful before you turn 65 or before you claim benefits. If you spot an error — a year where you worked but no earnings are recorded, or earnings that seem too low — you can contact Social Security to correct it. Errors are usually caught and fixed within a few years, but it is worth verifying.
What changes when you start receiving benefits
Once you claim Social Security or enroll in Medicare, you stop paying Social Security tax on your wages if you are no longer working. If you continue to work past age 67 (your full retirement age for most people born after 1960), you still pay Social Security tax on your earnings, but your benefits are not reduced.
If you claim Social Security before your full retirement age and continue working, your benefits may be reduced by $1 for every $2 you earn above an annual limit. In 2024, that limit is $23,400. This reduction ends once you reach your full retirement age, and Social Security recalculates your benefit upward to account for the months your payment was reduced.
Medicare premiums are based partly on your income from two years prior. If your income drops significantly after you retire, you can ask Medicare to recalculate your premiums based on your current income. This is called a life-changing event adjustment.
Self-employed workers and tax obligations
If you are self-employed, you pay both the employee and employer portions of Social Security and Medicare tax. This is called self-employment tax. You calculate it on Schedule SE of your tax return and pay it when you file your taxes or through quarterly estimated tax payments.
Self-employed workers can deduct half of their self-employment tax as a business expense on their income tax return, which provides some offset. You still pay the full 15.3%, but the deduction lowers your taxable income.
The same wage base limit applies to self-employed workers. You pay 12.4% (the combined employee and employer share of 6.2% each) on net earnings up to the annual limit, and 2.9% on all net earnings for Medicare, plus the additional 0.9% if your income exceeds the threshold.
Why these taxes matter for your retirement planning
Understanding how much you pay into Social Security and Medicare helps you plan for retirement. Your Social Security benefit is based on your 35 highest-earning years, so gaps in your work history lower your eventual benefit. If you took time out of the workforce, you may want to work a few extra years to replace a low-earning year and increase your benefit.
Medicare costs are tied to your income, so higher earners pay higher premiums. If you are still working and earning significantly, your Medicare premiums when you turn 65 will be based on your income from two years earlier. Planning your retirement date and income can affect what you pay for coverage.
These taxes also affect your overall tax picture. Social Security benefits may be taxable depending on your total income in retirement, and Medicare premiums are income-based. A financial advisor or tax professional can help you understand how these pieces fit together in your specific situation.
Frequently Asked Questions
Does my employer's contribution to Social Security and Medicare count toward my benefits?
Yes. The amount your employer pays on your behalf is recorded in your earnings record and counts toward your benefit calculation, even though you do not see it deducted from your paycheck. Both the employee and employer portions are considered when Social Security calculates your retirement benefit.
What if I worked in another country — do those earnings count?
It depends on whether that country has a totalization agreement with the United States. Some countries do, which means earnings in both countries can be combined to meet the work requirement for benefits. You would need to contact Social Security to find out whether your specific situation qualifies.
Can I get a refund of Social Security and Medicare taxes I paid?
No. These taxes fund current benefits and cannot be refunded. If you die before claiming benefits, your family may be may have access to to survivor benefits based on your earnings record, but you personally cannot recover the taxes you paid.
Do I pay Social Security and Medicare tax on all my income if I have multiple jobs?
Yes, but Social Security tax is applied separately to each job. If you earn above the wage base limit across multiple jobs, you may overpay Social Security tax. You can claim a credit for the overpayment when you file your income tax return.
What happens to Social Security and Medicare taxes if I am not a U.S. citizen?
If you have a valid work visa or green card and are working legally in the United States, you pay the same Social Security and Medicare taxes as any other worker. Your may be able to access for benefits depends on your immigration status and work history, which you can verify with Social Security.