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Social Security Tax Definition

July 21, 2016

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Social Security Tax Definition

Both employees and employers pay Social Security tax. The collected tax funds Social Security benefits (also known as Old-Age, Survivors, and Disability Insurance or OASDI).

Extended Definition for Social Security Tax

Employers withhold Social Security tax from employee wages. The employer also pays this tax, which is a matching contribution. The tax is then paid to the IRS on a semi-weekly or monthly schedule. Employers use the Electronic Federal Tax Payment System (EFTPS) to make payments. Employers report their tax deposits on either Form 941, or Form 944, depending on if they need to file a report quarterly or annually.

Self-employed workers pay a self-employment tax, which includes Social Security tax.

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