Social Security taxes are a flat 12.4% of workers’ income. When
you pay your staff, you’ll withhold 6.2% from their paychecks and pay a
matching 6.2%. Combined, this adds up to the required amount.
With Workful, you don’t have to calculate these taxes by hand. Not only will we calculate them for you, but we’ll also track your tax liability, so you will always know how much you owe when it’s time to pay. Learn more about Workful today.
Is there a maximum amount to withhold each year?
The wage base is the maximum amount of income an employee
must pay Social Security taxes on. For 2019, this amount is $132,900. If a
member of your team makes more than that, you’ll only withhold OASDI taxes on
the first $132,900 they earn.
If you have a staff member that works multiple jobs, they’re
responsible for letting you know if they’re getting close to the maximum
What are Social Security taxes used for?
Unlike federal income taxes, OASDI taxes are used in a
specific way. They pay for current and future Social Security retirement and
disability benefits, as well as benefits for widows and widowers.
The taxes you and your team are paying now are used to pay
the benefits being used today. When you’re ready to retire, your benefits will
be paid by the workforce paying Social Security taxes at that time.