Just what is Social Security? Social Security is an agency directed to provide benefits that would act as a safety net for all citizens covered by it. Social Security is not only concerned with retirement benefits for its members alone but also covers those who are disabled, dependent for support upon members of Social Security, widow and widower, a child of a member or a beneficiary of a member who died but who is entitled to receive a benefit. However, the benefits to be given depends on whether you satisfy all the requirements set by the Social Security.
The Social Security operates in this manner: would-be members are required to work and to pay their Social Security contributions. And when they retire the Social Security provide them with their retirement benefits. Likewise, in cases wherein members became disabled they are also entitled to receive disability benefits. Not only that, their spouse and their children are also to receive monthly benefits.
All of you must be wondering just how much you are to pay in order to receive all the aforementioned benefits. There is a standard set by the Social Security for which members are to follow. For members who are employed, 6.2% of your wages is with held; your employer is also to share 6.2% matching contributions. Your employer is tasked of depositing the withholding for your social security benefits. And also there is an additional 1.45% withheld from your wages and also a 1.45% matching contribution from your employer. The additional deductions from your wages are intended to cover your Medicare Benefits. The total deduction of Social Security from your wages is 7.65%.
The deduction is different for self-employed individuals. Self-employed members are asked to pay 15.3% contributions out from their taxable income. The 15.3% contribution covers both the Medicare as well as other Social Security Benefits. The 15.3% is required up to the first $87,900 of income and a 2.9% is required for earnings above $87,900. If we are to analyze the scenario we can plainly see that members who are self-employed tend to pay a much higher contributions compared to those employed members. The reason for this is that self-employed members can deduct half of their federal self-employment taxes from their total income when they are to pay their federal income tax.
For questions regarding your contributions, Social Security has a hotline which you may try to contact or you may visit Social Security Offices in your area.
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