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Provisions Affecting Payroll Tax Rates
Present law Social Security and Medicare tax rates

These provisions modify the current-law OASDI payroll tax rate of 12.4 percent (6.2 percent each for employees and employers). For the provisions listed below, we provide estimates of the financial effect on the OASDI program over the long-range period (the next 75 years) and for the 75th year. In addition, we provide detailed single year tables.

All estimates are based on the intermediate assumptions described in the 2009 Trustees Report. Choose the type of estimates (summary or detailed) from the list of provisions.

The provisions are grouped as follows:

  • E1: Payroll-tax rate changes with no changes in the taxable maximum.
  • E2: Additional payroll taxes from earnings above the taxable maximum.
Number Table and graph selection
E1.1 Raise payroll tax rates (for employees and employers combined) by 2.2 percentage points in 2010 and later.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision (effective dates may be different)
E1.2 Raise payroll tax rates (for employees and employers combined) by 2.0 percentage points in 2022 (to 14.4% combined) and by an additional 2.0 percentage points in 2052 (to 16.4% combined).
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision (effective dates may be different)
E1.3 Beginning in 2010, reduce the combined OASDI payroll tax rate from 12.4 percent to 11.4 percent.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision (effective dates may be different)
E1.4 Raise the payroll tax rates gradually (for employees and employers combined) by 0.1 percentage points in 2015; continue this increase each year for 20 years. By 2034, the combined employee and employer payroll tax rate would be 14.4 percent.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision (effective dates may be different)
E1.5 Increase the payroll tax rate (currently 12.4 percent) to 12.6 percent in 2012, 12.9 percent in 2020, 13.1 in percent in 2030, 13.9 percent in 2040, 13.5 percent in 2050, and 13.3 percent in 2060.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E1.6 Increase the payroll tax rate (currently 12.4 percent) to 12.6 percent in 2012, 12.9 percent in 2020, 13.3 in percent in 2030, 13.8 percent in 2040, 14.4 percent in 2060, and 14.5 percent in 2075.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E1.7 Increase the payroll tax rate (currently 12.4 percent) to 12.7 percent in 2012, 13.0 percent in 2025, 13.3 in percent in 2040, 14.0 percent in 2060, 14.5 percent in 2070, and 14.7 percent in 2080.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E2.1 Beginning in 2010, make all earnings subject to the payroll tax (but retain the current-law taxable maximum for benefit calculations).
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision (effective dates may be different)
E2.2 Beginning in 2010, make all earnings subject to the payroll tax and credit them for benefit purposes.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision (effective dates may be different)
E2.3 Determine the level of the contribution and benefit base such that 90 percent of the earnings would be subject to the payroll tax (phased in 2010-2019). All earnings subject to the payroll tax would be used in determining benefits.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision (effective dates may be different)
E2.4 Make 90% of the earnings subject to the payroll tax (phased in 2010-2019), but retain the current-law taxable maximum for benefit purposes. This estimate considers all self-employed earnings in computing the percentage of earnings subject to the payroll tax.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision (effective dates may be different)
E2.5 Raise the taxable maximum amount (the contribution and benefit base) to include 90 percent of total OASDI covered earnings. Phase in this increase gradually between 2011 and 2016. Benefit computations would reflect all earnings up to the new taxable maximum.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision (effective dates may be different)
E2.6 Impose a 3 percent payroll tax on OASDI covered earnings above the current taxable maximum starting in 2010. Benefit computations would not reflect any earnings above the taxable maximum amount.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision (effective dates may be different)
E2.7 In 2010 through 2012, raise the OASDI contribution and benefit base from $106,800 to $115,200 (in 2009 AWI indexed dollars). For years after 2012, the contribution and benefit base would be increased based on changes in SSA's average wage index. Additional earnings subject to the OASDI payroll tax would be credited for benefit calculation purposes.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision (effective dates may be different)
E2.8 Impose a 6 percent payroll tax on OASDI covered earnings above the current taxable maximum starting in 2010. Benefit computations would not reflect any earnings above the taxable maximum amount.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E2.9 Beginning in 2010, make all earnings subject to the OASDI payroll tax and give benefit credit using an PIA formula that is extended to provide less credit for those with AIMEs higher than the current-law maximum AIME level. The high end of the benefit formula, applied to 2009, would be: 15 percent of AIME between $4,482 and $8,900 ($106,800 divided by 12), plus 3 percent of AIME over $8,900.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E2.10 Beginning in 2010, raise the taxable maximum each year by an additional 2 percent over the current-law, wage-indexed amount until total earnings subject to payroll taxes equals 90 percent of all covered earnings. Credit the earnings for benefit purposes.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E2.11 Make all earnings subject to the employer OASDI payroll tax beginning in 2010. For the employee OASDI payroll tax and for benefit calculation purposes, the taxable maximum would equal the present-law taxable maximum for years 2009 and earlier. Beginning in 2010, the taxable maximum would be raised each year by an additional 2 percent over the current-law, wage-indexed amount until earnings subject to payroll taxes equals 90 percent of all covered earnings.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E2.12 Apply the following payroll tax rate above the current-law taxable maximum, with no credit toward benefits: 2.0 percent in 2012 and 3.0 percent in 2060.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E2.13 Increase the taxable maximum (contribution and benefit base) increases by an additional 2 percent over normal indexing starting in 2012, until 90 percent of OASDI covered earnings is taxable (achieved in 2048). The present-law taxable maximum is retained for benefit purposes; no benefit credit is given for earnings above the present-law taxable maximum.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E2.14 Apply the following payroll tax rates above the current-law taxable maximum, with no credit toward benefits: 2.0 percent in 2012, 3.0 percent in 2025, 3.5 percent in 2040, 4.5 percent in 2050, and 5.5 percent in 2060.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E2.15 Apply 2 percent payroll tax rate on earnings over $200,000 in 2017, with the $200,000 threshold wage-indexed after 2017. Give proportional benefit credit for additional earnings in AIME for benefit computation.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E2.16 Apply 2 percent payroll tax rate on earnings over $200,000 in 2017, with the $200,000 threshold wage-indexed after 2017. Give no benefit credit for additional earnings in AIME for benefit computation.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E2.17 Apply 3 percent payroll tax rate on earnings over $200,000 in 2017, with the $200,000 threshold wage-indexed after 2017. Give proportional benefit credit for additional earnings in AIME for benefit computation.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E2.18 Apply 3 percent payroll tax rate on earnings over $200,000 in 2017, with the $200,000 threshold wage-indexed after 2017. Give no benefit credit for additional earnings in AIME for benefit computation.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E2.19 Apply 4 percent payroll tax rate on earnings over $200,000 in 2017, with the $200,000 threshold wage-indexed after 2017. Give proportional benefit credit for additional earnings in AIME for benefit computation.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E2.20 Apply 4 percent payroll tax rate on earnings over $200,000 in 2017, with the $200,000 threshold wage-indexed after 2017. Give no benefit credit for additional earnings in AIME for benefit computation.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E2.21 Apply 2 percent payroll tax rate on earnings over $300,000 in 2017, with the $300,000 threshold wage-indexed after 2017. Give proportional benefit credit for additional earnings in AIME for benefit computation.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E2.22 Apply 2 percent payroll tax rate on earnings over $300,000 in 2017, with the $300,000 threshold wage-indexed after 2017. Give no benefit credit for additional earnings in AIME for benefit computation.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E2.23 Apply 3 percent payroll tax rate on earnings over $300,000 in 2017, with the $300,000 threshold wage-indexed after 2017. Give proportional benefit credit for additional earnings in AIME for benefit computation.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E2.24 Apply 3 percent payroll tax rate on earnings over $300,000 in 2017, with the $300,000 threshold wage-indexed after 2017. Give no benefit credit for additional earnings in AIME for benefit computation.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E2.25 Apply 4 percent payroll tax rate on earnings over $300,000 in 2017, with the $300,000 threshold wage-indexed after 2017. Give proportional benefit credit for additional earnings in AIME for benefit computation.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E2.26 Apply 4 percent payroll tax rate on earnings over $300,000 in 2017, with the $300,000 threshold wage-indexed after 2017. Give no benefit credit for additional earnings in AIME for benefit computation.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E2.27 Apply 2 percent payroll tax rate on earnings over $400,000 in 2017, with the $400,000 threshold wage-indexed after 2017. Give proportional benefit credit for additional earnings in AIME for benefit computation.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E2.28 Apply 2 percent payroll tax rate on earnings over $400,000 in 2017, with the $400,000 threshold wage-indexed after 2017. Give no benefit credit for additional earnings in AIME for benefit computation.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E2.29 Apply 3 percent payroll tax rate on earnings over $400,000 in 2017, with the $400,000 threshold wage-indexed after 2017. Give proportional benefit credit for additional earnings in AIME for benefit computation.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E2.30 Apply 3 percent payroll tax rate on earnings over $400,000 in 2017, with the $400,000 threshold wage-indexed after 2017. Give no benefit credit for additional earnings in AIME for benefit computation.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E2.31 Apply 4 percent payroll tax rate on earnings over $400,000 in 2017, with the $400,000 threshold wage-indexed after 2017. Give proportional benefit credit for additional earnings in AIME for benefit computation.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E2.32 Apply 4 percent payroll tax rate on earnings over $400,000 in 2017, with the $400,000 threshold wage-indexed after 2017. Give no benefit credit for earnings in AIME for benefit computation.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision
E2.33 Make 90% of the earnings subject to the payroll tax (phased in 2010-2019). In addition, apply a tax rate of 6.2 percent for earnings above the revised taxable maximum, phased in from 2010-2019. This additional tax rate would be paid by employers on wages of their employees, and by self-employed workers on their earnings. Benefit computations for workers would only reflect earnings below the revised taxable maximum.
Summary measures and graphs (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing the provision

Above provisions
Summary measures
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Last reviewed or modified June 11, 2010