• Social Security is a government-run social insurance program in the United States that provides income to retired workers and citizens with qualified disabilities preventing them from work. Social Security is funded through an income and payroll tax imposed upon the workforce and employers that pay wages.
  
  

What is the Social Security tax rate?

• The Social Security tax rate for a given individual depends on their employment status. According to the Social Security Administration, workers that are employees who receive wages pay 6.2 percent of their earnings up to $106,800 in Social Security taxes. Once the worker's pay exceeds 106,800, further income is not subject to Social Security taxes. The employer pays an equivalent amount in Social Security taxes; the worker and employer essentially split the cost of the Social Security tax. Self employed workers such as entrepreneurs and independent contractors must pay the full Social Security tax since they have no employer to pay half the tax for them. In other words, the Social Security tax rate for the self employed is 12.4 percent on earnings up to $106,800.
  
  

How do I pay Social Security taxes?

• Employees have Social Security taxes deducted from their paychecks automatically. Self employed workers, however, must pay Social Security taxes, Medicare taxes and income taxes in the form of estimated tax payments four times each tax year, since taxes are not automatically taken out of their income. It is likely that self employed individuals will not pay the exact amount of Social Security taxes owed when making estimated payments. Discrepancies must be resolved at the end of the year when filing a tax return. Overpayment can result in a tax refund, while underpayment can result in having to pay additional taxes or possibly incurring penalties for underestimating income.
  
  

When will I get Social Security income?

• The purpose of Social Security taxes for most workers is to receive income payments during retirement based on the amount of taxes contributed to the Social Security program during their working life. People can start receiving Social Security benefits at the age of 62. You can also elect to forgo receiving Social Security income until age 70 to increase the amount of income you will receive each month. While the amount you contributed to the Social Security program during your working life determines how much money you will be paid, the system is highly skewed toward promoting equality between different income levels. In other words, a worker that only made $20,000 a year during their working life will receive more than a fifth of the Social Security income of a worker that made $100,000 a year. According to the SSA, the goal of the Social Security "attempts to achieve social adequacy as well as individual equity."