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Provisions Affecting Payroll Taxes
Present law Social Security and Medicare tax rates

Present law contribution and benefit base

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 2015 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 15.3 percent in 2016 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 15.2 percent in 2028-2057, and to 18.0 percent in years 2058 and later.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing this or a similar provision:
E1.3 Reduce the payroll tax rate (currently 12.4 percent) to 11.4 percent in 2016 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 2021-2040, until the rate reaches 14.4 percent in 2040 and later.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing this or a similar provision:
E1.5 Increase the payroll tax rate (currently 12.4 percent) to 12.6 percent in 2018, 12.9 percent in 2026, 13.1 in percent in 2036, 13.9 percent in 2046, 13.5 percent in 2056, and 13.3 percent in 2066 and later.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing this or a similar provision:
E1.6 Increase the payroll tax rate (currently 12.4 percent) to 12.6 percent in 2018, 12.9 percent in 2026, 13.3 in percent in 2036, 13.8 percent in 2046, 14.4 percent in 2066, and 14.5 percent in 2081 and later.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing this or a similar provision:
E1.7 Increase the payroll tax rate (currently 12.4 percent) to 12.7 percent in 2018, 13.0 percent in 2031, 13.3 in percent in 2046, 14.0 percent in 2066, 14.5 percent in 2076, and 14.7 percent in 2086 and later.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memorandum 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 2018-2023, until the rate reaches 13.0 percent for 2023 and later.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memorandum 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 2019-2042, until the rate reaches 14.8 percent in 2042. Then increase the payroll tax rate an additional 0.1 percentage point in each year from 2081-2085, until the rate reaches 15.3 percent for 2085 and later.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing this or a similar provision:
E2.1 Eliminate the taxable maximum in years 2016 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)
Memorandum containing this or a similar provision:
E2.2 Eliminate the taxable maximum in years 2016 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 2016 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, adding a bend point at the current-law taxable maximum and applying a formula factor of 3 percent for AIME above this 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 2022 and later (phased in 2016-2021), 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 2015 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)
Memorandum containing this or a similar provision:
E2.5 Apply 12.4 percent payroll tax rate on earnings above $250,000 starting in 2016, 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 2016. 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:
E2.7 Apply a 6 percent payroll tax on earnings above the current-law taxable maximum starting in 2016. 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 2018-2065, and a 3 percent rate for years 2066 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:
E2.9 Apply the following payroll tax rates above the current-law taxable maximum: 2.0 percent in 2018, 3.0 percent in 2031, 3.5 percent in 2046, 4.5 percent in 2056, and 5.5 percent in 2066 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:
E2.10 Eliminate the taxable maximum in years 2026 and later. Phase in elimination by taxing all earnings above the current-law taxable maximum at: 1.24 percent in 2017, 2.48 percent in 2018, and so on, up to 11.16 percent in 2025. Provide benefit credit for earnings above the current-law taxable maximum, adding a bend point at the current-law taxable maximum and applying a formula factor of 5 percent for AIME above this new bend point.
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 2021 and later. Phase in elimination by taxing all earnings above the current-law taxable maximum at: 2.48 percent in 2017, 4.96 percent in 2018, and so on, up to 12.40 percent in 2021. 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 2016 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)
Memorandum containing this or a similar provision:
E2.12 Eliminate the taxable maximum in years 2027 and later. Phase in elimination by taxing all earnings above the current-law taxable maximum at: 1.24 percent in 2018, 2.48 percent in 2019, and so on, up to 11.16 percent in 2026. 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:
E2.13 Apply OASDI payroll tax rate on earnings above $400,000 starting in 2017, 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 2016 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)
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 2016-2025). 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 2016-2025). 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:
E3.3 Increase the taxable maximum such that 90 percent of earnings would be subject to the payroll tax (phased in 2017-2022). 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:
E3.4 Increase the taxable maximum from $106,800 to $115,200 (in 2009 AWI-indexed dollars), phased in 2016-2018. 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:
E3.5 Increase the taxable maximum each year by an additional 2 percent beginning in 2016 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 2018 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 2017 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 2023, apply 2 percent payroll tax rate on earnings over the wage-indexed equivalent of $200,000 in 2017, with the threshold wage-indexed after 2023. 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 2023, apply 2 percent payroll tax rate on earnings over the wage-indexed equivalent of $200,000 in 2017, with the threshold wage-indexed after 2023. 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 2023, apply 2 percent payroll tax rate on earnings over the wage-indexed equivalent of $300,000 in 2017, with the threshold wage-indexed after 2023. 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 2023, apply 2 percent payroll tax rate on earnings over the wage-indexed equivalent of $300,000 in 2017, with the threshold wage-indexed after 2023. 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 2023, apply 2 percent payroll tax rate on earnings over the wage-indexed equivalent of $400,000 in 2017, with the threshold wage-indexed after 2023. 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 2023, apply 2 percent payroll tax rate on earnings over the wage-indexed equivalent of $400,000 in 2017, with the threshold wage-indexed after 2023. 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 2016. For the employee payroll tax (6.2 percent) and for benefit credit purposes, beginning in 2016, 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 2016-2025). In addition, apply a tax rate of 6.2 percent for earnings above the revised taxable maximum (phased in from 2016-2025). 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 2017, apply 4 percent payroll tax rate on earnings above the wage-indexed equivalent of $400,000 in 2015, with the threshold wage-indexed after 2017. 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 (with thresholds wage-indexed after 2017); 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:

Above provisions
Summary measures
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Last reviewed or modified September 14, 2015