Why Did My Social Security Tax Go Down?
A drop in your Social Security tax withholding is often an expected part of the annual payroll cycle. Learn how your total earnings affect this calculation.
Noticing a decrease in the Social Security tax withheld from your paycheck can be confusing, but it is often a normal event. This tax, part of the Federal Insurance Contributions Act (FICA), funds retirement, disability, and survivor benefits. A drop in this tax does not necessarily indicate an error by your employer, as there are several standard reasons for this change related to your annual earnings.
Reaching the Annual Social Security Wage Limit
The most common reason for Social Security tax to stop being withheld is reaching the annual wage base limit. Each year, the Social Security Administration sets a maximum amount of earnings subject to this tax. For 2025, the 6.2% employee portion of the Social Security tax is only applied to the first $176,100 you earn.
Once your year-to-date gross wages exceed this threshold, your employer will stop withholding the 6.2% tax. For example, an employee earning $200,000 per year will have the tax withheld until their earnings surpass $176,100. For every subsequent paycheck within that year, the Social Security withholding will be zero.
This limit only applies to the Social Security portion of FICA taxes. The 1.45% Medicare tax has no wage base limit and will continue to be withheld from every paycheck, regardless of how much you earn. The cessation of the Social Security tax is a normal function of the tax code, not a mistake in your pay.
Changes in Your Pre-Tax Deductions
Changes to your pre-tax deductions can also cause a reduction in your Social Security tax. This tax is calculated on your taxable wages, not your total gross pay. Pre-tax deductions for certain benefits are taken from your gross pay before taxes are calculated, which lowers your taxable income.
Common pre-tax deductions that reduce wages subject to Social Security tax include payments for employer-sponsored health, dental, and vision insurance, or contributions to an HSA or FSA. When you enroll in or increase contributions to these plans, your taxable wages decrease, which lowers the amount of Social Security tax withheld on each paycheck.
For instance, if your gross pay is $3,000 per paycheck and you increase your pre-tax health insurance deduction from $100 to $200, your Social Security taxable wages decrease by $100. This directly reduces the Social Security tax calculated for that pay period.
However, not all pre-tax deductions affect Social Security wages. Contributions to retirement plans like a 401(k) or 403(b) reduce your income for federal income tax purposes but usually do not lower the wage base for Social Security tax.
Multiple Jobs and Tax Overpayments
Working for more than one employer during the year can lead to an overpayment of Social Security taxes. Each employer is required to withhold this tax up to the annual wage limit, and they do so independently of what you may have earned at another job. This can result in your combined earnings exceeding the limit, with too much tax being collected.
If your total wages from two or more jobs exceed the annual threshold, you will have overpaid Social Security tax. For example, if you earned $100,000 from one employer and $90,000 from a second, both would withhold Social Security tax on your full earnings. This would result in tax being paid on $190,000 of income, which is above the annual limit.
This overpaid tax is not lost. You can claim the excess amount as a refundable credit on your annual federal income tax return, which is reported on Schedule 3 (Form 1040). The IRS will then apply this credit to reduce your total tax liability or increase your tax refund.
How to Review Your Pay Stub for Errors
If you have considered the reasons above and still believe your Social Security withholding is incorrect, review your most recent pay stub. Look for the “YTD” or Year-to-Date earnings column. Compare this figure to the annual Social Security wage limit to see if you have reached the threshold.
Next, find the line item for Social Security tax, often labeled “OASDI,” and check the amount withheld for the current pay period and the year-to-date total. If you find a discrepancy, contact your company’s payroll or human resources department. They can provide a detailed explanation of the calculation and correct any errors.