Most workers pay Social Security tax automatically through payroll deduction
If you work as an employee and earn a paycheck, your employer takes Social Security tax out of your wages automatically. You pay 6.2% of your earnings up to a yearly cap (the cap changes each year). Your employer pays an equal 6.2% on your behalf. This happens whether you want it to or not — it is a requirement for nearly all jobs in the United States.
If you are self-employed, you pay both the employee and employer portions yourself, which comes to 15.4% of your net earnings. You send this to the IRS when you file your tax return or make quarterly estimated tax payments.
The money goes into a Social Security trust fund. When you reach retirement age, become disabled, or if your family members become may be able to access after your death, Social Security uses that fund to calculate your benefit amount.
Key Takeaways
- Employees pay 6.2% of wages in Social Security tax, taken directly from each paycheck, up to an annual earnings cap.
- Self-employed people pay 15.4% of net earnings in Social Security tax when they file their annual tax return.
- Certain workers — including most federal employees hired before 1984, some state and local government workers, and nonresident aliens on certain visas — do not pay Social Security tax.
- You cannot opt out of Social Security tax if you are in a job that requires it, even if you do not plan to claim benefits later.
- The amount you pay does not directly determine your benefit amount; instead, your 35 highest-earning years are used to calculate what you receive.
Who does not have to pay Social Security tax
Some groups of workers are exempt from paying Social Security tax. Most federal government employees hired before 1984 do not pay it; they are covered by a different retirement system called the Civil Service Retirement System (CSRS). Federal employees hired in 1984 or later do pay Social Security tax.
Some state and local government workers are exempt if their employer does not participate in Social Security. This varies widely by state and by employer. If you work for a city, county, or state agency, check with your payroll office to find out whether Social Security tax is being withheld from your pay.
Nonresident aliens on certain visa types — including F-1 students, J-1 exchange visitors, and some H-1B workers — do not pay Social Security tax on wages earned in the United States, though the rules are complex and depend on your specific visa status and country of citizenship.
Members of certain religious groups that have received an exemption from the IRS do not pay Social Security tax, though this is rare and requires formal approval.
What happens if you do not pay enough to may have access to for benefits
Social Security requires you to have earned enough credits to receive retirement, disability, or survivor benefits. You earn one credit for each $1,640 of wages you earn in a year (this amount changes yearly). Most people need 40 credits — roughly 10 years of work — to may have access to for retirement benefits at full retirement age.
If you have not worked long enough to earn 40 credits, you will not receive a retirement benefit based on your own work record. However, you may be able to receive a benefit based on a spouse's or ex-spouse's work record, depending on your age and marital status.
Even if you have paid Social Security tax for many years, your benefit amount is based on your 35 highest-earning years. Years with no earnings or very low earnings count as zeros in this calculation, which can lower your overall benefit.
Why you cannot opt out even if you do not plan to claim benefits
Social Security tax is mandatory for covered workers — you cannot choose to stop paying it or to skip it in years when you do not think you will need benefits later. The system is designed as insurance, not as a savings account you control. You pay in during your working years, and the money supports current retirees, disabled workers, and survivors of deceased workers.
Some people believe they will not live long enough to "get their money back" from Social Security, or they prefer to invest the money themselves. The law does not allow either of these reasons as grounds for opting out. If you are employed in a covered job, the tax is withheld automatically.
Self-employed workers and Social Security tax
If you are self-employed, you report your net business income on Schedule C of your tax return. You then calculate your self-employment tax (which includes both Social Security and Medicare) on Schedule SE. The Social Security portion is 12.4% of your net earnings (up to the yearly cap), though you can deduct half of this amount as a business expense on your tax return.
Self-employed people often pay this tax in quarterly installments using Form 1040-ES. If you do not pay enough during the year, you may owe additional tax when you file your return. Keeping records of your income and expenses throughout the year makes this calculation easier at tax time.
The yearly earnings cap and how it affects your tax
Social Security tax only applies to earnings up to a certain amount each year. In 2024, that cap was $168,600 — meaning you do not pay Social Security tax on any wages above that amount. The cap increases most years based on wage growth in the economy.
This means high earners pay a smaller percentage of their total income in Social Security tax than lower-wage workers do. For example, someone earning $50,000 pays tax on all of it, while someone earning $300,000 pays tax on only the first $168,600 of their earnings.
The earnings cap does not affect Medicare tax, which has no cap. High earners pay an additional 0.9% Medicare tax on earnings above a certain threshold.
What to ask your employer or tax preparer
If you are unsure whether Social Security tax is being withheld from your pay, ask your payroll or human resources department to show you a recent pay stub. Look for a line labeled "Social Security" or "OASDI" (Old-Age, Survivors, and Disability Insurance) — this shows the amount being deducted each pay period.
If you are self-employed and uncertain how to calculate your self-employment tax, a tax preparer or accountant can walk you through the process. The IRS also publishes Publication 334 (Tax Guide for Small Business) and Publication 587 (Business Use of Your Home), which explain self-employment tax in detail.
If you work for a government agency and are unsure whether you pay Social Security tax, contact your payroll office directly — the rules vary significantly by employer and hire date.
Frequently Asked Questions
Can I get a refund of Social Security tax I paid if I decide not to claim benefits?
No. Social Security tax is not refundable. Once you have paid it, the money goes into the Social Security trust fund. You cannot withdraw it or receive it back, even if you never claim retirement benefits. However, if you claim benefits and then change your mind, you may be able to withdraw your process within a certain time frame — ask Social Security about this option.
What if I worked in another country — does that count toward Social Security?
Work in most other countries does not count toward U.S. Social Security benefits. However, the United States has agreements with about 30 countries that allow work in those countries to count toward benefits under certain conditions. If you have worked abroad, contact Social Security to ask whether your foreign work record can be credited.
Do I pay Social Security tax on tips or bonuses?
Yes. Tips and bonuses are wages and are subject to Social Security tax. Your employer should include them in your gross income for tax purposes. If you receive tips, report them to your employer so they can withhold the correct amount of Social Security tax.
What if my employer did not withhold Social Security tax from my paycheck?
Contact your employer's payroll department when ready. This is a serious error. Your employer is required by law to withhold and pay Social Security tax. If your employer refuses to correct the error, you can file a complaint with the Department of Labor or contact the IRS. You may also want to consult a tax professional or employment attorney.
Does paying more Social Security tax mean I will get a bigger benefit?
Not directly. Your benefit is based on your 35 highest-earning years, not on the total amount you paid in tax. Earning more money in a year increases that year's earnings record, which may increase your benefit if that year is one of your 35 highest. However, there is an earnings cap, so very high earners do not see a proportional increase in benefits.