Virginia Contractor General Practice Test

What is the percentage for Social Security tax?

1. 5%

2. 6.2%

3. 7.5%

4. 8%

The correct answer is: 6.2%

The percentage for Social Security tax is set at 6.2%. This rate applies to earned income up to a certain threshold, known as the Social Security wage base limit, which is adjusted annually. This tax is critical because it funds the Social Security program, providing benefits for retirees, the disabled, and survivors of deceased workers. The 6.2% rate has been consistent for several years, making it an important figure for both employees and employers to remember when calculating payroll taxes. Understanding this rate is crucial for contractors and business owners, as accurate compliance with tax laws is essential for maintaining good standing with federal tax authorities.