What is the difference between the U.S. social security tax and the 401K, which is similar to our social security fund

The U.S. 401k is similar to our social security fund, which is technically equivalent to China's corporate annuity.

1, 401k plan, also known as the 401K provisions, 401k plan began in the early 1980s, is a kind of employees, employers *** with contributions to establish a fully funded pension insurance system, refers to the United States of America in 1978, the Internal Revenue Code, the new section 401 k provisions of the provisions of the law, recognized in 1979, 1981 and additional implementation of the rules, grew rapidly in the 1990s, gradually replacing the traditional Social Security system and becoming the social security program of choice for many U.S. employers. applies to private, for-profit companies.

2. The U.S. 401K is a corporate annuity. The U.S. pension is divided into two parts, one is the national level of social security funds, equivalent to China's pension insurance, to ensure that the employed person retired after the basic pension life. The other part is the enterprise's pension plan, 401K plan is only an important part of it, equivalent to China's enterprise annuity plan. To equate the U.S. 401K plan with China's pension would be an indiscreet statement.

3, social security tax, also known as the "payroll tax", is the United States federal government for the social security system to raise funds for a tax. The social security system in the United States sprouted in the 1930s during the Great Depression, began in 1935 during Roosevelt's "New Deal" period of the "Social Security Act".

4. The social security tax provides for a maximum taxable amount, and the amount of wages and salaries in excess of the limit is not taxed. The ceiling is adjusted annually by the Consumer Price Index (CPI), and in 1996, employers and employees were each required to pay a social security tax rate of 7.65 percent on wages up to $62,700 (sixty-two thousand, one hundred and twenty-two thousand) dollars ($61,200) in gross wages. In addition, employers and employees are each subject to a Medicare tax at a rate of 1.45 percent for the elderly and disabled on all wages in excess of these limits.

5. There are generally two methods of collecting social insurance tax: one is by withholding at source; the other is by self-declaration. Employees' taxes are withheld at source by the employer on the basis of the employee's taxable wages and salaries, at the rate established by law, and are reported together with the employer's own taxes on a quarterly basis. The federal insurance tax on self-employed persons is essentially similar except that self-employed persons must pay the entire tax themselves, unlike employees. If a self-employed person is both an employee and a self-employed person, he or she is first determined to be subject to the federal insurance tax in accordance with his or her status as an employee; if the total amount of wages earned by the taxpayer as an employee does not exceed the maximum amount of the taxable basis or is less than that amount, the tax is paid in accordance with the taxpayer's status as a self-employed person.