In 2011 there were some big changes to social security contribution limits for employees. It seems every year the federal government makes new changes to various taxing entities that affect the amount you have to pay in to the IRS, Social Security, and Medicare. While this is certainly an unpleasant reality for nearly every working American, it helps to understand what changes have occurred and when they take effect. As for the IRS, it would take several pages to list the numerous tax code changes for 2011, but for Social Security it’s fairly easy. Taxes went down!
For 2012, however, the big change is an increase in the maximum taxable income for social security tax. It will increase from $106,800 in 2011 to $110,100 for 2012.
For 2011, employees will pay social security tax at a rate of 4.2% of up to $106,800.00 in income, for a maximum social security contribution of $4,485.60. The income limit of $106,800.00 is unchanged from 2010. FICA stands for Federal Insurance Contributions Act with its roots dating back to 1935 when the US Government created the Social Security Program. Today, FICA taxes are collected from both employee and employer from the gross earnings of the individual. The following list details FICA taxes and Social Security limits for the last seven years: (Self employed individuals will have to pay a tax rate of FICA x 2 because they have no employer to pick up the other half)
2012 FICA Taxes and Social Security Limits
- Social Security Tax Rate – 4.20% until March 1, 2012, then 6.20% (employee) / 6.20% (employer)
- Social Security Income Limit – $110,100.00
- Medicare Tax Rate – 1.45%
- Maximum Social Security Contribution Amount – $4,485.60* (employee) / $6,826.20 (employer)
*This assumes that the reduced rate of 4.20% for social security tax will be extended throughout 2012. Otherwise, the reduced rate of 4.20% will increase to 6.20% effective March 1, 2012.
2011 FICA Taxes and Social Security Limits
- Social Security Tax Rate – 4.20% (employee) / 6.20% (employer)
- Social Security Income Limit – $106,800.00
- Medicare Tax Rate – 1.45%
- Maximum Social Security Contribution Amount – $4,485.60 (employee) / $6,621.60 (employer)
2010 FICA Taxes and Social Security Limits
- FICA Tax Rate – 7.65%
- Social Security Income Limit – $106,800.00
- Maximum Social Security Contribution Amount – $6,621.60
2009 FICA Taxes and Social Security Limits
- FICA Tax Rate – 7.65%
- Social Security Income Limit – $106,800.00
- Maximum Social Security Contribution Amount – $6,621.60
2008 FICA Taxes and Social Security Limits
- FICA Tax Rate – 7.65%
- Social Security Income Limit – $102,000.00
- Maximum Social Security Contribution Amount – $6,324.00
2007 FICA Taxes and Social Security Limits
- FICA Tax Rate – 7.65%
- Social Security Income Limit – $97,000.00
- Maximum Social Security Contribution Amount – $6,045.00
2006 FICA Taxes and Social Security Limits
- FICA Tax Rate – 7.65%
- Social Security Income Limit – $94,200.00
- Maximum Social Security Contribution Amount – $5,840.40
2005 FICA Taxes and Social Security Limits
- FICA Tax Rate – 7.65%
- Social Security Income Limit – $90,000.00
- Maximum Social Security Contribution Amount – $5,580.00
For more information on tax rates, check out the 2010 federal income tax rates.
Rob Berger
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Published or updated January 29, 2012.
{ 11 comments… read them below or add one }
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As I listen to debates on social security from raising the retirement age, to Congress raiding social security for general fund use, to privatization; I’ve heard no one talk about lifting the cap on social security. The way SS is setup right now makes it a regressive tax structure. Keep the rate at 7.65%, but not limit the ceiling. Even if it was raised to at least $200K to $250K would immensely aid SS health.
Roy Gertig is absolutlely correct. The wealthiest people in our nation only have to contribute what middle class managerial people contribute while making 2000 times as much income. That is not an exaggeration, do the math. Besides contributing nothing from their many millions a year in income, they also collect Social Security when they want to even though they don’t need it. There should not be a cap on contributions and there should be a means test to see if the person can collect Social Security. It is supposed to help people who worked all their lives but were unable to get a pension or had it dissolved by big banks who were bailed out with tax-free billions of taxpayers money. Middle America needs to revolt against the government that always makes laws to benefit the top 1% of America while killing the rest of the citizenry. America was set up to do that and has continued through every Administration.
amen
The ignorance in these comments is asstounding. Social Security was not a share-the-wealth program; it’s a forced retirement program. The money you get out is supposed to be the money you put in.
Lift the cap on social security? Fine, then I expect to get paid more when I retire. That cap is not that high; I appreciate the small pay raise I get in November from it being reached. I am not wealthy, at least not by my standards, but we all know that those evil “rich people” are really just “anyone who has more money than me” (never mind that it took me 20 very long, very miserable years of experience to finally make this amount).
President Franklin D. Roosevelt wanted the Federal Government to assist the elderly during their retirement years and establish aid for the disabled and survivors benefits for spouses and children of deceased workers. Before Social Security, care and monetary funding for these individuals was up to the states, local communities and family members.
Sorry, but a person making $58,000 a year should not have to pay a higher percentage of his or her income into the system than a person making $580,000 a year, which is exactly what is happening now. When the Social Security cap was initially set, it included 90% of all the income in the US. With the growing wage disparities, a great deal more than 10% is now untouchable; it’s approaching 20% with no end in sight. No one is saying rich people are “evil”, but surely they can better afford the same Social Security tax as the poor ones, right? If I hit the max SS cap, I’ll be happy to pay that 6.2% on up to a couple of million a year.
Speaking of which, why, with all the talk about Social Security “going broke” (e.g., taking in less than they put out — no shock during a serious recession, and unless it continues, not a threat of breaking it anytime soon), why are we suddenly paying 4.2% instead of 6.2%???
Patrice, did you even read the comment from TCinDC?
If you want welfare, then debate for a better welfare system. Social Security was not created to be wealth distribution, it was intended to be forced retirements savings so people don’t blow their money while they are young and expect everyone else to take care of them when they are old.
Everything you are talking about (raising ceiling, means testing, etc.) is changing it from what it was enacted to be.
The main reason the social security system is in trouble is because the government stole that (our) money to use it for other things. If they kept their hands off of it we would be fine.
I’m sorry you want more of my money but you can’t have it. I have a family to care for and my own retirement to plan for. If they want to implement means testing so be it, but don’t expect me to continue to pay into it if I am not getting anything out of it.
If you disagree with our capitalistic economy, please show me a truly successful socialistic society of 200+ years and 300+ million people.
Thought not.
Joe
We arn’t suposed to remember that they lowered the ss tax. That is to further brake the SS trust fund. So they can say that ss is under funded and can take control of the trust fund. The governments way of pulling the wool over our eyes. they want to elimanate ss all together and pocket the money. And they were talking of reinstating it in 2012 with a 2% increase. that way they would have more money to put in ther pockets.
Social Security paid its first benefits to poverty stricken elderly widows. The idea was and is that those are currently obligation work and earn money have some obligation to take care of those who can no longer fend for themselves.
It would seem to me that those who have benefited the most by being citizens of the USA owe the most.
So – I just passed over the threshold ($110,000) and I am happy because it means another $1600 per paycheck. I am all for an equal percent taxed, but there needs to be a cap. I have paid more into fica than most people earn. How should I be penalized because I found a way to have a better income?
Nobody in my family (on either side) had ever gone to college. I took out loans and graduated and paid off my loans within 3 years. I now make a very good living, but it wasn’t handed to me. People act like some people “get lucky” and make larger salaries.
I pay A LOT in taxes. I earn what I worked for. How is it my responsibility to provide even more of my income to others who have not applied themselves to the same degree?
I also live WELL within my means. My family and I have not been on a vacation in 3 years. None of my kids (5) have TVS or computers in their rooms. My car is a 2003 Toyota Matrix with 120k miles on it. My wife has a mini van with 180k miles on it. I see people “hurting” who make very foolish decisions.
Entitlement is an interesting behavior….