Make $100,000 a year? Here’s exactly how much more Social Security tax you’ll pay in 2025.

As with any government program, the money to fund Social Security has to come from somewhere. If you’re wondering where it comes from, the answer is: your paycheck.

Social Security derives most of its revenue from payroll taxes. If you see a deduction on your paycheck for FICA, it’s the amount you pay to fund Social Security and Medicare.

Miss the morning report? Wake up with Breakfast News in your inbox every market day. Register for free »

However, it’s not a given that you’ll pay Social Security taxes on your entire salary. Each year, the Social Security Administration sets a wage cap that determines how much income is subject to Social Security tax.

The Social Security wage cap will increase in 2025 compared to 2024. However, that doesn’t necessarily mean your personal tax bill will increase.

Tax planning is an important part of managing your finances. Therefore, it is important to know how much Social Security tax you will have to pay in 2025. And that depends on your salary.

In 2024, the Social Security wage cap is $168,600. In 2025, this cap increases to $176,100. That means higher earners generally have to pay Social Security tax on an additional $7,500 of income.

This also means that if you earn $100,000 per year now and continue to earn $100,000 per year in 2025, your personal Social Security tax bill will not increase. While the Social Security wage cap increases in 2025, Social Security Tax rate stays the same.

This rate is 12.4% of your income up to the annual salary cap. And if you have an employer, split that bill evenly down the middle.

That means if you make $100,000 a year, you’ll have to pay $12,400 a year into Social Security. In reality, however, your employer covers $6,200 and you pay the remaining $6,200 yourself. However, if you are self-employed and earn $100,000, you must pay the entire $12,400 yourself.

It’s fair to say that most people don’t like paying taxes. Even if your personal Social Security tax bill doesn’t increase in 2025, you might not be thrilled about having to spend that money.

But remember: Without payroll taxes, Social Security wouldn’t exist. By paying these taxes, you help keep the program afloat.

That doesn’t mean that every dollar you pay into Social Security is a dollar you’ll get back in retirement. However, if you’re counting on Social Security to fund your senior years, you’ll still have to pay.

The story continues