Are Social Security Payroll Taxes Going Up?

The social security payroll tax withheld from every American worker's paycheck is often a source of contention for many people. The present rate of 6.2% that is withheld from most employees’ paycheck is the percentage amount that has been in effect for a number of years. For the vast majority of American workers, Social Security taxes do not go up - but this is not true for American workers that earn the highest incomes.

How Social Security Taxes Are Raised

Rather than increase the rate of the Social Security tax as a percentage, Congress usually authorizes the Internal Revenue Service and Social Security Administration to raise the income limit for which Social Security payroll taxes are withheld. The income cap for which Social Security taxes are withheld simply means that Social Security taxes are withheld only up to a certain income amount, and thereafter - only Medicare contributions are withheld.

On average, the Social Security income level has been raised by about 3% to 5% every year in recent years. In 2008, the maximum income level for which social security payroll taxes were withheld was $102,000, and in 2009 that amount was increased to $106,800. So, in effect raising the maximum level for which Social Security can we be withheld can be viewed as an increase for people that earn the most money.