What are Social Security wages?

Social Security wages refer to the income earned by an individual that is subject to Social Security taxes. These taxes fund the Social Security program, which provides retirement, disability, and survivor benefits.

How do Social Security wages work?

When an individual earns income from employment, a portion of their wages is withheld by the employer to pay Social Security taxes. Both employees and employers contribute to Social Security through FICA taxes.

What is the Social Security wage base?

The Social Security wage base is the maximum amount of an individual's earnings subject to the Social Security portion of FICA taxes. Once an individual's income exceeds this base, they no longer pay Social Security taxes on the excess amount. The wage base is adjusted annually for inflation.

What is included in Social Security wages?

Social Security wages generally include income earned from employment, such as salaries, wages, bonuses, commissions, net earnings from self-employment, and reported tips.

What is excluded from Social Security wages?

Income that is excluded from Social Security wages includes investment income (e.g., interest, dividends, capital gains), pensions, annuities, certain disability payments, workers' compensation benefits, and reimbursed business travel expenses.

Who is subject to Social Security wages?

Most workers in the United States are subject to Social Security taxes, and their wages are considered Social Security wages. However, certain individuals, such as government employees covered by pension plans, certain religious groups, non-resident aliens working temporarily in the US, and students in work-study programs, may be exempt or partially exempt from Social Security taxes.