What Is the TSSE Deduction on My Paycheck?
Unravel the mystery of the TSSE deduction on your paycheck. Understand what this payroll code means for your earnings and why it's there.
Understanding the various codes and abbreviations on a pay stub can be confusing. This article aims to clarify “TSSE” as it appears on your paycheck, demystifying this common payroll deduction.
Understanding TSSE
TSSE stands for Social Security Employee Contribution. This deduction is a federal withholding, forming a core part of the Federal Insurance Contributions Act (FICA) taxes. FICA taxes are a combination of Social Security and Medicare taxes, funding programs that provide benefits for retirees, the disabled, and Medicare recipients. The Social Security portion of FICA provides for retirement, disability, and survivor benefits.
The employee’s contribution to Social Security is generally set at a specific percentage of gross wages, up to an annual wage base limit. For the employee, this rate is 6.2% of earnings. These funds are collected by the employer and remitted directly to the federal government.
Who is Affected by TSSE
The TSSE deduction, or Social Security Employee Contribution, applies to nearly all employees across the United States. If you are an employee earning wages, it is highly probable that this deduction will appear on your pay stub. This broad applicability ensures that contributions are made to the Social Security system by most members of the workforce.
There are specific earnings thresholds that determine the maximum amount subject to Social Security tax each year. Once an individual’s earnings surpass this annual wage base limit, no further Social Security tax is withheld from their pay for that calendar year. This system ensures equitable contributions based on earnings while capping the total annual amount.
TSSE on Your Paycheck
When you review your pay stub, the TSSE deduction will typically be listed under the “Deductions” or “Taxes” section. It may appear as “TSSE,” “SS,” “OASDI,” or “FICA – SS.” This amount is calculated based on your gross pay for the period, applying the federal Social Security tax rate.
The TSSE deduction is generally considered a post-tax deduction in terms of income tax, meaning it is withheld from your gross pay before your net pay is determined. However, it is a mandatory withholding that directly reduces your take-home pay. Understanding this line item helps you reconcile your gross earnings with the net amount deposited into your account.