The Social Security withholding tax is an amount deducted from your paycheck and used to fund any potential Social Security benefits that you might be eligible for. All people legally working in the United States are required to pay into the social security system, and there are generally no exceptions. While employees have Social Security withheld from their paychecks, employers are also required to match the amount of Social Security paid by the employee.
Limits on Social Security Withholding
The current Social Security withholding tax rate is 6.2 percent. Employers are required to withhold 6.2 percent, and to pay an additional and matching 6.2 percent, on all income amounts up to $106,800. Therefore, Social Security taxes must be withheld, from an employee's paycheck, until the amount withheld reaches the $6621.60.
This is the amount that employees must pay into the system, and also the amount that employers must make in matching contributions. For income amounts over $106,800, neither you nor the employer is required to pay additional social security taxes - for the current year. This amount is reset at the beginning of each year. The actual withholding tax rate percentage seldom changes; however, the maximum income, for which the withholding is required, changes almost every year.
If you have an amount greater than $6621.60 withheld from your paycheck in a given tax year, then any excess will generally be returned to you in the form of a refund, when you file your income tax return.