Provisions Affecting Payroll Taxes
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 2022 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 16.0 percent
in 2023 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 16.2 percent
in 2035-2064, and to 20.0 percent in years 2065 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 2028-2047, until the rate reaches 14.4 percent in
2047 and later.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memoranda 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 2025-2030, until the rate reaches 13.0 percent for 2030 and later.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memoranda 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 2026-2049, until the rate reaches 14.8 percent in 2049 and later.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memoranda containing this or a similar provision: |
| E1.10 |
Increase the payroll tax rate by 0.1 percentage point per year for 2024 through
2033 so that it equals 13.4 percent for 2033 and later. The increase would be split
evenly between the employer and employee share, and would be split between OASI
and DI in proportion to currently scheduled payroll tax rates.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memoranda containing this or a similar provision: |
| E2.1 |
Eliminate the taxable maximum in years 2023 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) Memoranda containing this or a similar provision: |
| E2.2 |
Eliminate the taxable maximum in years 2023 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: |
| E2.4 |
Eliminate the taxable maximum for years 2029 and later (phased in 2023-2029),
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 2022 that
were in excess of that year's current-law taxable maximum; (2) a new bend point
equal to $8,933 in 2023, indexed by wages after 2023; 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) Memoranda containing this or a similar provision: |
| E2.5 |
Apply 12.4 percent payroll tax rate on earnings above $250,000 starting in 2023,
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: |
| E2.11 |
Eliminate the taxable maximum in years 2028 and later. Phase in elimination by
taxing all earnings above the current-law taxable maximum at: 2.48 percent in 2024,
4.96 percent in 2025, and so on, up to 12.40 percent in 2028. 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 2022 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) Memoranda containing this or a similar provision: |
| E2.12 |
Eliminate the taxable maximum in years 2034 and later. Phase in elimination by
taxing all earnings above the current-law taxable maximum at: 1.24 percent in
2025, 2.48 percent in 2026, and so on, up to 12.40 percent in 2034. 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) Memoranda containing this or a similar provision: |
| E2.13 |
Apply OASDI 12.4 percent payroll tax rate on earnings above $400,000 starting in
2024, 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 2023
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) Memoranda containing this or a similar provision: |
| E2.14 |
Apply OASDI 12.4 percent payroll tax rate on earnings above $250,000 starting in
2024, and tax all earnings once the current-law taxable maximum exceeds $250,000.
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 2023 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) Memoranda containing this or a similar provision: |
| E2.15 |
Apply OASDI 12.4 percent payroll tax rate on earnings above $300,000 starting in
2024, and tax all earnings once the current-law taxable maximum exceeds $300,000.
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 2023 that
were in excess of that year's current-law taxable maximum; and (2) a formula factor
of 3 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: |
| E2.16 |
Apply OASDI 12.4 percent payroll tax rate on earnings above $250,000 starting in
2023, and tax all earnings once the current-law taxable maximum exceeds $250,000.
Increase the computed level of the SSA average wage index for years after 2022 by
amounts ranging from 0.7 percent for 2023 to 0.9 percent for 2035 and later. 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 2022 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 2023-2032). 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 2023-2032). 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: |
| E3.5 |
Increase the taxable maximum each year by an additional 2 percent beginning
in 2023 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 2025 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
2024 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 2030, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $200,000 in 2017 (about $331,800 in 2030), with
the threshold wage-indexed after 2030. 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 2030, apply 2 percent payroll tax rate on earnings over
the wage-indexed equivalent of $200,000 in 2017 (about $331,800 in 2030),
with the threshold wage-indexed after 2030. 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 2030, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $300,000 in 2017 (about $497,400 in 2030), with
the threshold wage-indexed after 2030. 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 2030, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $300,000 in 2017 (about $497,400 in 2030), with
the threshold wage-indexed after 2030. 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 2030, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $400,000 in 2017 (about $663,300 in 2030), with
the threshold wage-indexed after 2030. 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 2030, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $400,000 in 2017 (about $663,300 in 2030), with
the threshold wage-indexed after 2030. 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 2023. For the employee payroll tax (6.2 percent) and for benefit credit purposes,
beginning in 2023, 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 2023-2032). In addition, apply a tax rate of 6.2 percent
for earnings above the revised taxable maximum (phased in from 2023-2032). 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 2024, apply 4 percent payroll tax rate on earnings above the
wage-indexed equivalent of $400,000 in 2015 (about $557,700 in 2024), with
the threshold wage-indexed after 2024. 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, or about $557,700 and
$697,200 in 2024 (with thresholds wage-indexed after 2024); 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: |
| E3.17 |
Beginning in 2024, increase the taxable maximum by twice the rate of increase
in the national Average Wage Index, but never by less than 3 percent. Provide
benefit credit for earnings up to the revised taxable maximum levels.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |
| E3.18 |
Increase the taxable maximum linearly over 4 years to $267,900 for 2027. After
2027, index the taxable maximum to AWI plus 0.5 percentage point. Apply benefit
credit on additional earnings taxed.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memoranda containing this or a similar provision: |
| E3.19 |
Increase the taxable maximum such that 90 percent of earnings would be subject
to the payroll tax (phased in linearly from 2024-2029). Provide benefit credit
for additional earnings taxed, using a secondary PIA formula. This secondary
PIA formula involves: (1) an "AIME+" derived from additional annual earnings
taxed over the current-law taxable maximum; and (2) a formula factor of 2.5
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: |