Employees

• All employees pay Social Security tax on the income they earn in the United States. Social Security tax appears as "OASDI" on your pay stub. Technically, the Social Security tax rate is 12.4 percent of your income, though employees pay only 6.2 percent and employers must pay a matching 6.2 percent. So if you earn $1,000 in a paycheck, you will pay $62 in Social Security tax and your employer will pay another $62. Social Security tax applies to all wages up to $106,800 per year (as of 2009), so if you earn more than that, the extra amount will not be taxed for Social Security.
  
  

The Self-Employed

• Self-employed people are responsible for paying their own Social Security tax, also equal to 12.4 percent of all income under $106,800 (as of 2009). Because self-employed people, by definition, do not have an employer, the self-employed party must pay the full 12.4 percent. This amount is included as part of the 15.3 percent self-employment tax that all self-employed people must pay (the additional 2.9 percent is for Medicare tax).
  
  

Use of Funds

• The Social Security Administration uses Social Security taxes to fund retirement and disability programs in America. The Social Security Administration uses fairly detailed, and sometimes complex, tables to determine your right to payment out of the Social Security fund. Generally, the longer you work and the more you earn during your lifetime, the more you will be entitled to when you retire. Disability benefits are calculated slightly differently, depending on your work and income status.
  
  

SSI

• The Supplemental Security Income (SSI) program is designed to provide financial benefits for low-income disabled people. If you are disabled and have little to no income, and you have few assets (as of 2009, less than $2,000, or $3,000 if married), the SSI program may be able to help you financially. The payments are not large, but they might be enough to help you get by. It is impossible to estimate payments, because each application is considered and approved individually.
  
  

SSDI

• Unlike the SSI program, the Social Security Disability Insurance (SSDI) program is not dependent on low-income status; benefits are instead distributed according to work history. Generally, you must have worked at least 1-1/2 years out of the last three years to qualify for SSDI. As with the SSI program, though, you must have a legitimate disability. If you have worked the required amount and you are now disabled, you may be entitled to SSDI compensation, though again, the amount is impossible to predict, because each application is considered and approved individually.