© ANDREI ASKIRKA / Shutterstock.com
The money from Social Security has to come from somewhere. And the main place it comes from is payroll taxes. When you earn money, you pay a portion of it into Social Security to fund the program for future generations.
You’re required to pay 12.4% of your income into Social Security up until a certain point. If you’re a salaried worker, though, you get to split that bill with your employee, leaving you to pay 6.2% of your income into Social Security while the company you work for pays the other 6.2%.
This year, the wage cap for Social Security is higher than it was in 2025. Let’s review what that means and who it’s apt to hurt the most.
Some Workers With Higher Paychecks Could Lose Out
Social Security taxes a certain amount of income each year. In 2025, the program’s wage cap was $176,100. This year, it’s $184,500.
The typical worker may not even be aware that Social Security has a wage cap because they don’t make nearly enough money to stop having to pay into the program at any point. But if you’re a higher earner, you may notice that your Social Security tax bill is larger this year than last.
Now for very high earners, this Social Security change may be a non-event. If you’re earning $750,000 a year, chances are, paying taxes on an extra $8,400 of income isn’t something to cry about.
And remember, if you’re a salaried employee, the company you work for is splitting that extra bill. So while an $8,400 increase in Social Security’s wage cap would mean looking at about $1,041 in additional taxes if you’re self-employed, if you’re splitting that increase with an employer, your share is only about $521.
On the other hand, if you fall into the category of being a higher earner, but not a super huge earner, this Social Security change might really sting.
Let’s say you earn $185,000 a year. Having to pay taxes on an additional $8,400 of income might deal your finances a harsh blow, especially if you live in an expensive part of the country in order to swing that $185,000 salary.
Should Social Security Even Have a Wage Cap?
While some workers may be angry about paying more Social Security taxes this year, others might argue that the program should not even have a wage cap. However, it’s worth noting that Social Security has a maximum monthly benefit it pays retirees each year. That maximum benefit is tied to a maximum wage base that changes annually.
In other words, higher earners may not pay Social Security taxes on all of their income. But they also don’t get credit on all of their earnings in the context of calculating their monthly benefits. They only get credit for earnings up to the wage cap.
All told, the way Social Security taxes wages may be an imperfect system. But for now, it’s working well enough.
In the coming years, Social Security may have to increase or even lift the wage cap to address its impending financial shortfall. But that’s not a 2026 problem.