What is the base of social security contributions in the United States?

American social security tax is the core of the federal pension system. Social security tax is the second largest tax in the United States after personal income tax. It is uniformly collected by the federal government nationwide according to a certain proportion of wages, and enterprises are forced to withhold and pay wages according to employees' social security numbers (SSN) every month.

The social security tax rate is dynamically adjusted by the social security department and implemented after approval by the National Assembly. For example, the social security tax rate is 10. 16% of employees' wages at 1980, and it is increased to 12.4% at 1990. Since 1990, the social security tax rate has not been adjusted. The social security tax rate for 20 15 years is 12.4% of employees' wages, and employees and employers pay 50% respectively. That is, employees and employers each pay 6.2% of employees' wages; For self-employed, it is 12.4% of salary.

The federal pension system encourages "saving more social security tax at work and receiving more pension after retirement". Employees with higher wages pay more social security taxes and receive more federal pensions after retirement. At the same time, in order to reflect social equity and prevent a very small number of retirees from receiving too many pensions, the social security tax has set an upper limit of taxable wages, and the part that exceeds the upper limit of taxable wages will no longer pay social security tax. The upper limit of taxable wages is adjusted year by year with the changes of prices and wage levels. For example, in 2006, the upper limit of taxable salary was 94,200 USD, which was raised to118,500 USD in 20 15 years. Accordingly, in 20 15, employees can pay the social security tax of146.94 million USD at most (1.85×12.4%).