Jump to content Social Security Online |
Automatic Increases | |||||
www.socialsecurity.gov |
|
|||||
Contribution and Benefit BaseUpdated October 19, 2004 |
Introduction | Social Security's Old-Age, Survivors, and Disability Insurance (OASDI) program limits the amount of earnings subject to taxation for a given year. The same annual limit also applies when those earnings are used in a benefit computation. This limit increases each year with increases in the national average wage index. We call this annual limit the contribution and benefit base. For earnings in 2005, this base is $90,000. Estimates of future bases may be found in Table V.C1 of the "Trustees Report." |
Taxation of earnings under Social Security | The OASDI tax rate for wages paid in 2005 is set by statute at 6.2 percent for employees and employers, each. Thus, an individual with wages equal to or larger than $90,000 would contribute $5,580.00 to the OASDI program in 2005, and his or her employer would contribute the same amount. The OASDI tax rate for self-employment income in 2005 is 12.4 percent. (Tax rates of 1.45 percent for employees and employers, each, and 2.90 percent for self-employed persons, are applied to all earnings—without a taxable maximum—under Medicare's Hospital Insurance program.) |
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note: Amounts for 1937-74 and for 1979-81 were set by statute; all other amounts were determined under automatic adjustment provisions of the Social Security Act. |
|
Privacy Policy | Accessibility Policy | Linking Policy | Site Map |