Accounting Dictionary

Social Security Taxes

Social security taxes are composed of two taxes. 6.2% of employee’s earnings is paid by employees. An additional 6.2% is paid by employers. There is a yearly maximum on social security taxes which is adjusted yearly for inflation.

If John made $100, $6.20 would be taken out his pay and sent to the social security administration. His employer would match it with an additional $6.20.

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