Wage Tax for Social Security Tax
- a 6.2 percent social security tax, also known as old age, survivors, and disability insurance (OASDI)
- a 1.45 percent Medicare tax, also known as hospital insurance (HI)
For self-employed workers, the Self-Employment tax is 15.3 percent, consisting of:
- a 12.4 percent OASDI tax
- a 2.9 percent HI tax
OASDI tax applies only up to a wage base ($147,000 in 2022), which includes most wages and self-employment income up to the annual wage cap. Thus, OASDI tax applies only to the taxpayer’s first $147,000 in wages or net earnings from self-employment. Taxpayers do not pay any OASDI tax on earnings that exceed $147,000.
There is no wage cap for HI tax.
Maximum Social Security Tax for 2022
For workers who earn $147,000 or more in 2022:
- an employee and their employer will both pay a total of $9,114 in social security tax ($147,000 x 6.2 percent)
- a self-employed worker will pay a total of $18,228 in social security tax ($147,000 x 12.4 percent).
Additional Medicare Tax
Higher-income workers may have to pay an additional Medicare tax of 0.9 percent. This tax applies to wages and self-employment income that exceed:
- $250,000 for married taxpayers who file a joint return
- $125,000 for married taxpayers who file separate returns
- $200,000 for other taxpayers
The annual wage cap does not affect the additional Medicare tax.
Benefit Increase for 2022
Finally, a cost-of-living adjustment (COLA) will increase social security and SSI benefits for 2022 by 5.9 percent. The COLA is intended to ensure that inflation does not erode the purchasing power of these benefits.
If you have questions on any of these 2022 adjustments, we are happy to help.