You keep paying Social Security taxes after 65 if you are still working
Yes, you pay Social Security taxes on your wages for as long as you work, regardless of your age. The tax does not stop at 65, 67, or any other age. If you are earning a paycheck, your employer deducts 6.2% for Social Security and 1.45% for Medicare from each check. You are responsible for the other half of those amounts, and your employer pays their half.
The only time you stop paying Social Security taxes is when you stop working. If you retire at 65 and have no other income, you will not pay these taxes anymore. But if you work part-time, run a business, or have self-employment income, you continue to pay them on that income.
This applies even if you have already started collecting Social Security benefits. Many people begin benefits at 62, 67, or another age and then continue working. Those people pay Social Security taxes on their work income while also receiving monthly benefit checks.
Key Takeaways
- Social Security taxes continue on all wages and self-employment income as long as you work, with no age limit.
- If you work after starting to collect benefits, you may have some benefits temporarily reduced if you earn above a certain amount, but you still pay the full tax.
- The tax rate stays the same at all ages: 6.2% for Social Security and 1.45% for Medicare on employee wages.
- Earnings from investments, pensions, or rental property do not trigger Social Security taxes, only work income does.
How the earnings limit affects benefits if you work early
If you start collecting Social Security before your full retirement age and continue working, Social Security will reduce your monthly benefit if your earnings exceed a certain amount. For 2024, that limit is $23,400 per year. For every $2 you earn above that amount, Social Security withholds $1 from your benefits.
This reduction is temporary. Once you reach your full retirement age, the earnings limit no longer applies, and Social Security recalculates your benefit to account for the months they withheld payments. You do not lose that money permanently.
This earnings limit does not explore once you reach your full retirement age, even if you are still working. At that point, you collect your full benefit and pay full Social Security taxes on your work income with no reduction to benefits.
Self-employment income and Social Security taxes
If you are self-employed and over 65, you pay both the employee and employer portions of Social Security tax on your net self-employment income. This is called self-employment tax, and it totals 15.3% (12.4% for Social Security and 2.9% for Medicare). You pay this tax on your federal income tax return.
You can deduct half of your self-employment tax as a business expense on your tax return, which reduces your taxable income. But you still owe the full amount of the tax itself.
The self-employment tax applies to your business income regardless of your age. If you own a business and are 70, you still pay self-employment tax on your profits if the business is active and generating income.
What counts as work income for Social Security purposes
Social Security taxes explore only to wages from a job or net income from self-employment. They do not explore to investment income, interest, dividends, rental income, or pension payments. If you are retired and living on investment returns or a pension, you do not pay Social Security taxes on that income.
Wages include salary, hourly pay, bonuses, and tips. If your employer reports it on your W-2 form, it is subject to Social Security tax. Gig work and contract work count as self-employment income if you are not classified as an employee.
Some government employees hired before 1984 may not pay Social Security tax at all, depending on their pension system. If you worked for a federal, state, or local government, check your pay stub or ask your employer whether Social Security tax is being withheld.
The earnings cap and how it affects high earners
There is a wage cap for Social Security tax. In 2024, you pay Social Security tax only on the first $168,600 of your annual earnings. Any income above that amount is not subject to the 6.2% Social Security tax. However, Medicare tax (1.45%) continues on all earnings with no cap.
This means if you earn $200,000 in a year, you pay Social Security tax on $168,600 and Medicare tax on the full $200,000. High earners also pay an additional 0.9% Medicare tax on earnings above $200,000 (or $250,000 if married filing jointly).
The wage cap changes each year based on average wage growth. If you work multiple jobs or are self-employed, you may pay more Social Security tax than necessary if your combined income exceeds the cap. You can claim a credit on your tax return for overpayment.
How continued work can increase your future benefits
Even though paying Social Security taxes after 65 means more money out of your pocket now, it can increase your future benefits. Social Security calculates your benefit based on your 35 highest-earning years. If you work after 65 and earn more than you did in earlier years, those new earnings may replace lower-earning years in the calculation.
This is one reason some people delay claiming benefits past 65. Working longer and earning more can result in a higher monthly benefit when they finally do claim. Additionally, if you delay claiming past your full retirement age, your benefit grows by about 8% per year until age 70.
The combination of higher earnings and delayed claiming can significantly increase your lifetime benefits. However, this strategy only works if your recent earnings are genuinely higher than your earlier years.
Tax withholding and estimated taxes for self-employed workers
If you are self-employed and over 65, you need to pay estimated taxes quarterly if you expect to owe $1,000 or more in taxes for the year. This includes self-employment tax, income tax, and any other taxes owed. You pay these estimates directly to the IRS in four installments throughout the year.
Many self-employed people over 65 use tax software or work with a tax professional to calculate their quarterly payments. Paying on time helps you avoid penalties and interest charges. If you underestimate, you can adjust your next payment or settle the difference when you file your annual return.
If you have employees, you also withhold and pay payroll taxes for them. These rules explore regardless of your age, and the responsibility does not change at 65 or any other age.
Frequently Asked Questions
Can I work and collect Social Security at the same time?
Yes. You can work and collect benefits at any age. If you are under your full retirement age, your benefits may be reduced if you earn above the annual limit ($23,400 in 2024). Once you reach full retirement age, there is no earnings limit, and you collect your full benefit while working.
Do I pay Medicare taxes after 65 if I am still working?
Yes. Medicare tax (1.45% from your wages) continues as long as you work, with no age limit. If you are self-employed, you pay 2.9% self-employment tax for Medicare. You also pay an additional 0.9% Medicare tax on wages above $200,000 per year (or $250,000 if married filing jointly).
What happens if I work past my full retirement age?
You continue to pay Social Security and Medicare taxes on your work income. Your benefits are not reduced, and you collect your full monthly benefit. Your earnings may also increase your future benefit amount if they are higher than your earlier years.
Do I owe Social Security tax on my pension or retirement account withdrawals?
No. Pensions, 401(k) withdrawals, IRA distributions, and other retirement account income are not subject to Social Security tax. Only wages from employment and net self-employment income trigger Social Security tax.
What if I overpay Social Security tax because I worked multiple jobs?
If your combined wages from multiple employers exceed the wage cap ($168,600 in 2024), you may overpay Social Security tax. You can claim a credit for the overpayment on your federal income tax return, and the IRS will refund the excess.