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How is Social Security financed?

Social Security is financed through a dedicated payroll tax. Employers and employees each pay 6.2 percent of wages up to the taxable maximum of $168,600 (in 2024), while the self-employed pay 12.4 percent.

Total income, including interest, to the combined OASI and DI Trust Funds amounted to $1.351 trillion in 2023. ($1.233 trillion from net payroll tax contributions, $51 billion from taxation of benefits, and $67 billion in interest)

The payroll tax rates are set by law, and for OASI and DI, apply to earnings up to a certain amount. This amount, called the contribution and benefit base, or taxable maximum, rises as average wages increase.