Social Security Tax Definition

Both employees and employers pay Social Security tax on an employee’s wages. The collected tax funds Social Security benefits (also known as Old-Age, Survivors, and Disability Insurance, or OASDI).

Social Security Tax Extended Definition

Employers withhold Social Security tax from employee wages. The Social Security tax rate is 6.2%. The employer also pays a matching Social Security tax rate of 6.2%.

Employers then pay the tax to the IRS on a semi-weekly or monthly schedule. Employers use the Electronic Federal Tax Payment System (EFTPS) to make payments. Employers report their tax deposits on either Form 941 or Form 944, depending on if they need to file a report quarterly or annually.

Self-employed workers pay a self-employment tax, which includes the Social Security tax.

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Last Updated By

Rachel Blakely-Gray | May 01, 2023