Social Security 2025: What is the maximum new tax limit for Americans? Check if you are exempted from paying taxes

The Social Security tax limit has been increased this year and the maximum amount that is liable for Social Security tax in 2025 is $176,100, a surge from $168,600 in 2024. The yearly rise assists fund programs like the Cost of Living Adjustment.

Accordingly, a worker’s maximum Social Security tax payment (via payroll withholding) in 2025 will be $10,918.20 (6.2% of $176,100).

Those who are self-employed would pay both the employer and employee rates of 6.2% each, or 12.4%. However, a employed individual is supposed to pay half of the total tax and their company will cover the other half of the amount.

Also Read: New Social Security procedures to impact payments for millions; in-person visits required from March 31

Know about Social Security tax limits

The government decides on Social Security tax limits on the basis of rise in the National Average Wage Index (NAWI), which typically increases annually.

The main aim of the adjustments is to maintain Social Security payouts in line with inflation.

The 6.2% Social Security payroll tax is not applied to any income that exceeds the wage ceiling. If an employee is earning $180,000 in 2025, then he/she will pay $10,918.20 in Social Security taxes ($176,100 × 6.2%).

However, they will not be taxed on any further earnings ($180,000 – $176,100, or $3,900) because their income exceeds the $176,100 limit.

Social Security tax limits: Who all are exempted from paying taxes?

Some people may be excluded from paying Social Security taxes. A religious exemption may be claimed by certain religious organisations that publicly oppose Social Security benefits. Nonresident immigrants may have an exemption due to the type of visa they have.

There may be an exception for students who are working at their university. In some cases, employees of a foreign government might be excluded too.