What Is Social Security Tax?

The Social Security tax is a payroll tax that was started by the United States Government in the 1930s. This tax is imposed upon working people and their employers.

For 2011, the maximum taxable earnings amount for Social Security is $106,800. The Social Security tax (OASDI) rate for wages paid in 2011 is 4.2 percent for employees and 6.2 percent for employers. 

For example, an individual with wages equal to or more than $106,800 would contribute $4,485.60 to Social Security in 2011.  The employer would contribute $6,621.60.

Related Link:

Federal Income tax Table

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