What Are Social Security Taxes?

Social Security tax is one of the payroll taxes employers are responsible for withholding and paying. It is separate from Medicare tax, but the two are commonly grouped together as FICA taxes.

If your business pays employees, you’ll need to understand how Social Security tax works, including who pays it, how much to withhold, how to calculate the employer match, and how to deposit the tax. This guide explains what business owners need to know about Social Security taxes and payroll.

What Are Social Security Taxes?

Social Security taxes are federally mandated contributions to the Social Security program. Employers withhold 6.2% of an employee’s wages for Social Security tax and pay a matching 6.2% employer share. Self-employed workers generally pay both the employee and employer portions through self-employment tax, for a combined Social Security tax rate of 12.4% up to the annual wage base.

Social Security taxes were established under the Social Security Act of 1935 to help fund benefits for eligible retired workers, people with disabilities, and surviving family members.

On employee paychecks, Social Security tax withholding may appear as OASDI, which stands for Old-Age, Survivors, and Disability Insurance. Social Security and Medicare taxes are often grouped together as FICA taxes.

What Is The Social Security Tax Rate?

The Social Security tax rate is 6.2% of an employee’s wages up to the annual Social Security wage base. Employers must withhold 6.2% from an employee’s wages and pay a matching 6.2% employer share, making the combined Social Security tax rate 12.4%.

For 2026, Social Security tax applies only to wages up to $184,500. This means the maximum employee Social Security tax withheld in 2026 is $11,439. Employers also pay up to $11,439 per employee for the employer share. The IRS and Social Security Administration both list the 2026 wage base as $184,500.

Who Pays Social Security Taxes?

Most employees, employers, and self-employed workers pay Social Security taxes. In general, employers withhold 6.2% of an employee’s taxable wages for Social Security and pay a matching 6.2% employer share.

Self-employed individuals, including many sole proprietors and independent contractors, generally pay both the employee and employer portions through self-employment tax. This means they pay the 12.4% Social Security portion of self-employment tax up to the annual Social Security wage base. Self-employed taxpayers may be able to deduct the employer-equivalent portion of self-employment tax when calculating adjusted gross income, but they are still responsible for both portions of the tax.

Who Is Exempt From Paying Social Security Taxes?

Most US employees, employers, and self-employed individuals must pay Social Security taxes. However, some workers or types of wages may be exempt from Social Security tax, including:

• Members Of Certain Religious Groups: Members of certain religious groups may qualify for an exemption from Social Security and Medicare taxes, but they must apply and meet strict IRS requirements.
• Individuals Who Have Already Reached The Annual Wage Base: Social Security tax only applies up to the annual wage base. For 2026, wages above $184,500 are not subject to Social Security tax, though they may still be subject to Medicare tax.
• Some Students: Students working for the school, college, or university where they are enrolled may be exempt from Social Security and Medicare taxes in certain situations.
• Self-Employed Individuals With Less Than $400 In Net Earnings: Self-employed individuals generally do not owe self-employment tax unless they have $400 or more in net earnings from self-employment.
• Certain Public Sector Employees: Some federal, state, or local government employees may be covered by a public retirement system instead of Social Security.
• Some Family Employees: Some family employment may be exempt from Social Security tax, depending on the worker’s age, relationship to the employer, business structure, and type of work.
• Some Nonresident Aliens: Some nonresident aliens may be exempt from Social Security and Medicare taxes depending on visa type, work type, and tax status.
• Certain Other Narrow Worker Categories: Some payments to specific worker groups may be exempt depending on IRS rules and the worker’s circumstances.

What Are Social Security Taxes Used For?

Social Security taxes are used to fund benefits for eligible retired workers, people with disabilities, and surviving family members. Unlike a personal retirement account, Social Security is a pay-as-you-go program, meaning current payroll taxes help fund benefits for current beneficiaries.

The Social Security taxes you and your employees pay are used to support today’s benefit payments. In the future, younger workers will pay into the program to help fund benefits for the next generation of eligible recipients.

How To Calculate Social Security Taxes For Payroll

To calculate Social Security taxes for payroll, multiply an employee’s taxable wages by the 6.2% Social Security tax rate. The result is the amount you’ll withhold from the employee’s paycheck. As the employer, you’ll also pay a matching 6.2% employer share.

Social Security tax only applies up to the annual wage base. For 2026, the Social Security wage base is $184,500, which means employers should stop withholding Social Security tax once an employee’s taxable wages reach that amount.

How To Pay Social Security Taxes As An Employer

Employers generally deposit Social Security taxes, Medicare taxes, and withheld federal income taxes through the Electronic Federal Tax Payment System (EFTPS). Your deposit schedule will usually be either monthly or semiweekly, depending on your total employment tax liability during the IRS lookback period.

If your business reported $50,000 or less in employment taxes during the lookback period, you’re generally a monthly depositor. If your business reported more than $50,000, you’re generally a semiweekly depositor. Employers must also follow the IRS next-day deposit rule if they accumulate $100,000 or more in employment taxes on any day during a deposit period.

Because payroll tax deposit rules can get complicated, employers should confirm their deposit schedule with the IRS, their accountant, or their payroll software before making deposits.

How To Pay Social Security Taxes As A Freelancer

Freelancers, independent contractors, and sole proprietors generally pay Social Security and Medicare taxes through self-employment tax. If you expect to owe $1,000 or more in tax when you file your return, you may need to make estimated tax payments.

Estimated tax payments may cover both income tax and self-employment tax, including the Social Security portion. Federal estimated tax payments are generally due April 15, June 15, September 15, and January 15 of the following year. If a due date falls on a weekend or legal holiday, the deadline may move to the next business day.

There are several ways to make estimated tax payments, including online through IRS Direct Pay or EFTPS, by mail, or through the IRS2Go app.

The Bottom Line On Social Security Taxes

Social Security taxes are one of the payroll taxes employers are responsible for withholding and paying. Employers withhold 6.2% of an employee’s taxable wages for Social Security and pay a matching 6.2% employer share, up to the annual Social Security wage base. For 2026, that wage base is $184,500.

Payroll software can help calculate Social Security taxes, withhold the correct employee amount, track the employer match, and support payroll tax deposits and filings. However, employers are still responsible for making sure payroll information is accurate.

Whether you use payroll software, work with an accountant, or handle payroll manually, double-check your tax calculations, deposit schedule, and filing requirements to avoid costly penalties.