Social security tax is one of the two FICA-mandated US taxes. It is a tax which contributes to the well-being of millions of Americans. It aids them through retirement, and disabilities, among other reasons. The tax funds the social security plan, which helps individuals who have served the country or are less fortunate. It also helps compensate for retirement and makes it easier for individuals to retire. Social Security Tax is paid by employees and employers, and funds a social security plan, as mentioned before. The tax is 6.2% of employee pay and applies to both employees and employers, which makes it 12.4%. Social security tax.
What is Social Security Program?
The social security program is a support towards individuals who have lost earnings. These individuals can be retirees, and people with disabilities, and this applies towards deceased individuals as well. It is an American program that is operated through Disability Insurance, and the Old-Age and Survivors Insurance. Combined, the social security program works through the OASDI fund, which is a combination of both the funds mentioned before. Both funds work in harmony. In the US, social security assistance is possibly upwards of $1500 (the numbers vary depending on various conditions).
Social Security tax is a result of the social security program. It is a tax mandated by the FICA (Federal Insurance Contributions Act), alongside Medicare tax (known as hospital insurance tax) Social Security tax contributes to the funding and well-being of Americans. The tax is the deducted from an individual’s payout that contribute to this fund. In the US, the current rates for this tax are 6.2% for employees, and the same for employers. The combined total leads to 12.4%, which is the company total for the tax. In addition, unlike income tax. The taxable limit for social security tax, is $160,000, as of 2023, and will be $168,000 in 2024. In addition, the Social Security tax is regressive and not a progressive one. Regressive taxes are applied regardless of income. This means that every employee receives the % of the tax they are supposed to, regardless of their income. Progressive taxes increase the tax % depending on the income of an individual, taxing higher incomes more. A regressive tax means that individuals earning less will have to pay a larger proportion of tax.
Social Security Tax is a FICA-Mandated Tax which contributes to the American Social Security Fund & Program.
In order to apply for social security program one needs to be over 62 years of age, and have 40 work credits, or a family member who is willing to get benefits for you.
It is 6.2% for employees, and 6.4% for employers, combining to make a total of 12.4%.
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