Social Security Benefits
Social Security is a federal benefit program funded by taxes on employees and their employers. Social Security and Medicare taxes are withheld from your paycheck and the university matches that amount, sends those taxes to the Internal Revenue Service, and reports your earnings to the Social Security Administration.
Benefits are paid primarily during retirement and are meant to supplement other income you have from pension plans, savings and investments. Your Social Security benefit is a percentage of your earnings, averaged over most of your working lifetime. Under current regulations, the amount of your Social Security benefits will not be reduced because of the payments you receive from your USC retirement plan. Social Security also provides benefits for disabled workers and their dependents, and benefits for the surviving dependents of a worker who dies. The Medicare program provides health insurance for American citizens and permanent residents over age 65 who work for at least 10 years in Medicare-covered employment and their spouses.
Who's eligible?
All employees, with the exception of those claiming student status or holding certain types of visas, pay Social Security (FICA-OASDI) and Medicare (FICA-Medicare) taxes through payroll deduction.
Cost
The combined tax rate for Social Security and Medicare is 7.65%. The employee and USC each pay 6.2% in Social Security taxes on earnings up to the maximum taxable amount (in 2009, the maximum taxable earnings will be $106,800). The employee and USC each pay 1.45% in Medicare taxes on all earnings.
What do I need to do?
Social Security taxes are automatically deducted from your paycheck. Make sure the name under which your earnings are reported is the same as the name on your Social Security card. The Social Security Administration sends annual statements to those working in Social Security-covered employment who are over age 25. You can request the statement online at any age or obtain a request form from University Payroll Services.
| Enroll |
Coverage starts |
Change or cancel |
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No enrollment needed, tax is mandatory |
Taxes are withheld beginning with your first paycheck |
No |
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Questions?
Visit the Social Security Administration Web site, which includes information about when you can draw Social Security benefits and how to estimate your retirement benefits, including a benefit calculator that lets you use different parameters and assumptions about when you will stop working, your earnings projections, etc. Questions about the amount of Social Security taxes withheld from your paycheck should be directed to your home department coordinator.
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