What does "social security tax withheld" include?

The term "social security tax withheld" specifically refers to the portion of an employee's earnings that is deducted from their paycheck to contribute to the social security system. This includes the employee's share of social security tax, which is mandated by federal law to fund the social security program that provides benefits for retirees, the disabled, and survivors of deceased workers.

When an employee receives their pay, a specific percentage of their earnings is withheld and allocated towards their social security contributions. This amount is reported on their W-2 form each year. Understanding this concept is crucial, as it impacts both the employee's take-home pay and their future social security benefits.

In contrast, the employer's contribution is a separate liability and is not withheld from employee wages; it represents an additional cost that employers must contribute on behalf of their employees, thus distinguishing it from what is specifically deducted from an employee's paycheck. As for the total social security benefits received, this pertains to the benefits individuals may collect later in life, not the taxes withheld during their working years. Lastly, amounts exempt from federal tax calculations relate to different aspects of tax reporting and do not have a direct connection to the social security taxes that are withheld from an employee's pay.