Provisions Affecting Payroll Taxes
These provisions modify: (1) the current-law OASDI payroll tax rate of 12.4 percent (6.2 percent each for employees and employers); or (2) the contribution and benefit base (taxable maximum), which limits the amount of earnings subject to payroll tax and credited for benefit computation. We provide a summary list of all options (printer-friendly PDF version) in this category. For each provision listed below, we provide an estimate 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 graphs and detailed single year tables. We base all estimates on the intermediate assumptions described in the 2021 Trustees Report.
Choose the type of estimates (summary or detailed) from the list of provisions.
We group these provisions as follows:| Number | Table and graph selection |
|---|---|
| E1.1 |
Increase the payroll tax rate (currently 12.4 percent) to 16.1 percent in
2022 and later.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| E1.2 |
Increase the payroll tax rate (currently 12.4 percent) to 16.4 percent in
2034-2063, and to 20.4 percent in years 2064 and later.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| E1.4 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage
point each year from 2027-2046, until the rate reaches 14.4 percent in
2046 and later.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memoranda containing this or a similar provision: |
| E1.8 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage point
each year from 2024-2029, until the rate reaches 13.0 percent for 2029 and later.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memoranda containing this or a similar provision: |
| E1.9 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage point
each year from 2025-2048, until the rate reaches 14.8 percent in 2048 and later.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memoranda containing this or a similar provision: |
| E1.10 |
Increase the payroll tax rate by 0.1 percentage point per year for 2023 through
2032 so that it equals 13.4 percent for 2032 and later. The increase would be split
evenly between the employer and employee share, and would be split between OASI
and DI in proportion to currently scheduled payroll tax rates.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memoranda containing this or a similar provision: |
| E2.1 |
Eliminate the taxable maximum in years 2022 and later, and apply full 12.4
percent payroll tax rate to all earnings. Do not provide benefit credit for
earnings above the current-law taxable maximum.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memoranda containing this or a similar provision: |
| E2.2 |
Eliminate the taxable maximum in years 2022 and later, and apply full 12.4
percent payroll tax rate to all earnings. Provide benefit credit for earnings
above the current-law taxable maximum.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| E2.3 |
Eliminate the taxable maximum in years 2022 and later, and apply full 12.4
percent payroll tax rate to all earnings. Provide benefit credit for earnings
above the current-law taxable maximum. Create a new bend point at the current-law
taxable maximum with a 3 percent formula factor applying above the new bend point.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| E2.4 |
Eliminate the taxable maximum for years 2028 and later (phased in 2022-2028),
and apply full 12.4 percent payroll tax rate to all earnings. Provide benefit
credit for earnings above the current-law taxable maximum that are subject to
the payroll tax, using a secondary PIA formula. This secondary PIA formula involves:
(1) an "AIME+" derived from annual earnings from each year after 2021 that were
in excess of that year's current-law taxable maximum; (2) a new bend point equal
to 134 percent of the monthly current-law taxable maximum; and (3) formula factors
of 3 percent and 0.25 percent below and above the new bend point, respectively.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memoranda containing this or a similar provision: |
| E2.5 |
Apply 12.4 percent payroll tax rate on earnings above $250,000 starting in 2022,
and tax all earnings once the current-law taxable maximum exceeds $250,000. Do not
provide benefit credit for additional earnings taxed.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memoranda containing this or a similar provision: |
| E2.6 |
Apply a 3 percent payroll tax on earnings above the current-law taxable maximum starting
in 2022. Do not provide benefit credit for earnings above the current-law taxable maximum.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| E2.8 |
Apply a 2 percent payroll tax on earnings above the current-law taxable maximum for
years 2024-2071, and a 3 percent rate for years 2072 and later. Do not provide benefit
credit for earnings above the current-law taxable maximum.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| E2.11 |
Eliminate the taxable maximum in years 2027 and later. Phase in elimination by taxing
all earnings above the current-law taxable maximum at: 2.48 percent in 2023, 4.96 percent
in 2024, and so on, up to 12.40 percent in 2027. Provide benefit credit for earnings
above the current-law taxable maximum that are subject to the payroll tax, using a
secondary PIA formula. This secondary PIA formula involves: (1) an "AIME+" derived from
annual earnings from each year after 2022 that were in excess of that year's current-law
taxable maximum; and (2) a formula factor of 5 percent on this newly computed "AIME+".
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memoranda containing this or a similar provision: |
| E2.12 |
Eliminate the taxable maximum in years 2033 and later. Phase in elimination by taxing
all earnings above the current-law taxable maximum at: 1.24 percent in 2024, 2.48 percent
in 2025, and so on, up to 12.40 percent in 2033. Provide benefit credit for earnings
above the current-law taxable maximum. Create a new bend point at the current-law taxable
maximum with a 3 percent formula factor applying above the new bend point.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memoranda containing this or a similar provision: |
| E2.13 |
Apply OASDI 12.4 percent payroll tax rate on earnings above $400,000 starting in 2023,
and tax all earnings once the current-law taxable maximum exceeds $400,000. Provide benefit
credit for earnings above the current-law taxable maximum that are subject to the payroll
tax, using a secondary PIA formula. This secondary PIA formula involves: (1) an "AIME+"
derived from annual earnings from each year after 2022 that were in excess of that year's
current-law taxable maximum; and (2) a formula factor of 2 percent on this newly computed
"AIME+".
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memoranda containing this or a similar provision: |
| E2.14 |
Apply OASDI 12.4 percent payroll tax rate on earnings above $250,000 starting in 2023,
and tax all earnings once the current-law taxable maximum exceeds $250,000. Provide benefit
credit for earnings above the current-law taxable maximum that are subject to the payroll
tax, using a secondary PIA formula. This secondary PIA formula involves: (1) an "AIME+"
derived from annual earnings from each year after 2022 that were in excess of that year's
current-law taxable maximum; and (2) a formula factor of 2 percent on this newly computed
"AIME+".
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memoranda containing this or a similar provision: |
| E2.15 |
Apply OASDI 12.4 percent payroll tax rate on earnings above $300,000 starting in 2023,
and tax all earnings once the current-law taxable maximum exceeds $300,000. Provide
benefit credit for earnings above the current-law taxable maximum that are subject to
the payroll tax, using a secondary PIA formula. This secondary PIA formula involves:
(1) an "AIME+" derived from annual earnings from each year after 2022 that were in excess
of that year's current-law taxable maximum; and (2) a formula factor of 3 percent on
this newly computed "AIME+".
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| E3.1 |
Increase the taxable maximum such that 90 percent of earnings would be subject
to the payroll tax (phased in 2022-2031). Provide benefit credit for earnings
up to the revised taxable maximum.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| E3.2 |
Increase the taxable maximum such that 90 percent of earnings would be subject
to the payroll tax (phased in 2022-2031). Do not provide benefit credit for
additional earnings taxed.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| E3.5 |
Increase the taxable maximum each year by an additional 2 percent beginning in
2022 until taxable earnings equal 90 percent of covered earnings. Provide benefit
credit for earnings up to the revised taxable maximum.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memoranda containing this or a similar provision: |
| E3.6 |
Increase the taxable maximum each year by an additional 2 percent beginning in
2024 until taxable earnings equal 90 percent of covered earnings. Do not provide
benefit credit for additional earnings taxed.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| E3.7 |
Increase the taxable maximum by an additional 2 percent per year beginning in
2023 until taxable earnings equal 90 percent of covered earnings. Provide benefit
credit for earnings up to the revised taxable maximum. Create a new bend point
equal to the current-law taxable maximum with a 5 percent formula factor applying
above the new bend point.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| E3.8 |
Beginning in 2029, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $200,000 in 2017 (about $305,400 in 2029), with the threshold wage-indexed
after 2029. Provide proportional benefit credit for additional earnings taxed, based
on the payroll tax rate applied to the additional earnings divided by the full 12.4
percent payroll tax rate.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| E3.9 |
Beginning in 2029, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $200,000 in 2017 (about $305,400 in 2029), with the threshold wage-indexed
after 2029. Do not provide benefit credit for additional earnings taxed.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| E3.10 |
Beginning in 2029, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $300,000 in 2017 (about $458,400 in 2029), with the threshold wage-indexed
after 2029. Provide proportional benefit credit for additional earnings taxed, based
on the payroll tax rate applied to the additional earnings divided by the full 12.4
percent payroll tax rate.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| E3.11 |
Beginning in 2029, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $300,000 in 2017 (about $458,400 in 2029), with the threshold wage-indexed
after 2029. Do not provide benefit credit for additional earnings taxed.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| E3.12 |
Beginning in 2029, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $400,000 in 2017 (about $611,100 in 2029), with the threshold wage-indexed
after 2029. Provide proportional benefit credit for additional earnings taxed, based
on the payroll tax rate applied to the additional earnings divided by the full 12.4
percent payroll tax rate.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| E3.13 |
Beginning in 2029, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $400,000 in 2017 (about $611,100 in 2029), with the threshold wage-indexed
after 2029. Do not provide benefit credit for additional earnings taxed.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| E3.14 |
Eliminate the taxable maximum for the employer payroll tax (6.2 percent) beginning in
2022. For the employee payroll tax (6.2 percent) and for benefit credit purposes, beginning
in 2022, increase the taxable maximum by an additional 2 percent per year until taxable
earnings equal 90 percent of covered earnings.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| E3.15 |
Increase the taxable maximum such that 90 percent of earnings are subject to the
payroll tax (phased in 2022-2031). In addition, apply a tax rate of 6.2 percent for
earnings above the revised taxable maximum (phased in from 2022-2031). Provide benefit
credit for earnings taxed up to the revised taxable maximum.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| E3.16 |
Beginning in 2023, apply 4 percent payroll tax rate on earnings above the wage-indexed
equivalent of $400,000 in 2015 (about $526,200 in 2023), with the threshold wage-indexed
after 2023. Provide benefit credit for additional earnings taxed, using a secondary PIA
formula. This secondary PIA formula involves: (1) an "AIME+" derived from annual earnings
taxed only between 2015 wage-indexed equivalents of $400,000 and $500,000, or about $526,200
and $657,900 in 2023 (with thresholds wage-indexed after 2023); and (2) a formula factor
of 2 percent on this newly computed "AIME+".
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| E3.17 |
Beginning in 2023, increase the taxable maximum by twice the rate of increase in the
national Average Wage Index, but never by less than 3 percent. Provide benefit credit
for earnings up to the revised taxable maximum levels.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| E3.18 |
Increase the taxable maximum linearly over 4 years to $248,400 for 2026. After 2026,
index the taxable maximum to AWI plus 0.5 percentage point. Apply benefit credit on
additional earnings taxed.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memoranda containing this or a similar provision: |
| E3.19 |
Increase the taxable maximum such that 90 percent of earnings would be subject to the
payroll tax (phased in linearly from 2023-2028). Provide benefit credit for additional
earnings taxed, using a secondary PIA formula. This secondary PIA formula involves: (1)
an "AIME+" derived from additional annual earnings taxed over the current-law taxable
maximum; and (2) a formula factor of 2.5 percent on this newly computed "AIME+".
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |