At what rate is Social Security tax typically calculated?

The Social Security tax is typically calculated at a rate of 6.2% of an individual’s earned income, which applies up to a specific income limit known as the wage base limit. This percentage is established by federal law and is applied to income from employment, which is why it is a set percentage rather than a fluctuating rate. Employers also contribute an equal amount of 6.2%, making the total contribution to Social Security 12.4%.

This rate has been consistent for many years, providing a stable source of funding for the Social Security program, which benefits retirees and individuals with disabilities. Understanding this rate and its application is crucial for both employees and employers when calculating payroll taxes and ensuring compliance with federal tax regulations.