"You're required to pay 12.4% of your income into Social Security up until a certain point. If you're a salaried worker, though, you get to split that bill with your employee, leaving you to pay 6.2% of your income into Social Security while the company you work for pays the other 6.2%. This year, the wage cap for Social Security is higher than it was in 2025. Let's review what that means and who it's apt to hurt the most."
"Social Security taxes a certain amount of income each year. In 2025, the program's wage cap was $176,100. This year, it's $184,500. The typical worker may not even be aware that Social Security has a wage cap because they don't make nearly enough money to stop having to pay into the program at any point. But if you're a higher earner, you may notice that your Social Security tax bill is larger this year than last."
Social Security is funded mainly by payroll taxes, with a 12.4% tax on earnings up to an annual wage cap. Salaried workers split that 12.4% evenly with employers, paying 6.2% while employers pay the other 6.2%. The taxable wage cap increased from $176,100 in 2025 to $184,500 this year, creating additional taxable income for higher earners. Very high earners face a modest additional bill; mid-to-high earners near the cap can feel the increase more. Self-employed people bear the full increase, while salaried workers shoulder about half of the added tax burden.
Read at 24/7 Wall St.
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