Listen to a Business English Dialogue About Social security tax
Molly: Hi Allison, do you know what social security tax is?
Allison: Yes, it’s a payroll tax that funds the Social Security program, which provides retirement and disability benefits to eligible individuals.
Molly: That’s correct. Employees and employers both contribute to the Social Security tax.
Allison: How much is typically withheld for Social Security tax?
Molly: Currently, employees contribute 6.2% of their wages, while employers match that amount, making the total contribution 12.4%.
Allison: Are there any income limits for Social Security tax?
Molly: Yes, only income up to a certain threshold is subject to the tax, known as the Social Security wage base.
Allison: What happens to the money collected through Social Security tax?
Molly: The funds go towards paying benefits to current retirees and beneficiaries, as well as building reserves for future beneficiaries.
Allison: Is Social Security tax the same as Medicare tax?
Molly: No, they’re separate payroll taxes. Medicare tax funds the Medicare program, which provides health insurance to eligible individuals.
Allison: Thanks for explaining, Molly. Social Security tax seems like an important part of funding retirement benefits.
Molly: No problem, Allison. It’s crucial for ensuring financial security for retirees and those with disabilities.