Social Security: An Employer's Investment 

Introduction 

Most people tend to think of Social Security as a program that will help them in their 

retirement years. And as an employer, you may view Social Security as little more 

than the matching tax you pay to cover each of your employees. While that's part of 

the picture, Social Security means a lot more to your employees than retirement, and 

a lot more to you than taxes. This leaflet explains how you are providing protection 

for all your employees and their families through Social Security. 

A Word About The Taxes You Pay 

The Social Security and Medicare tax rate for employees and employers is 7.65 

percent each. Of that rate, 6.2 percent is used to finance Social Security retirement, 

disability, and survivors benefits, and 1.45 percent goes toward the Medicare 

program. In 1997, you withhold the full rate, 7.65 percent, up to a maximum of 

$65,400 in wages. For employees who earn more than $65,400, you continue to 

withhold the Medicare portion of Social Security tax, or 1.45 percent, on the rest of 

their earnings. And of course, as an employer, you match these withholdings. 

Social Security: Part Of Your Employee Benefit Package 

Every time you issue a W--2 to one of your employees and send the corresponding 

form to the Social Security Administration (SSA), you contribute toward the Social 

Security benefits that one day may be payable to the employee and his or her family. 

That's because all Social Security benefits are based on earnings that you and other 

employers report to SSA. Whether your employees are part time, seasonal, or 

temporary, all wages reported will increase any potential benefits. 

Social Security offers a comprehensive benefit package, especially when combined 

with other benefits you may offer to your employees. Here's an idea of what you are 

helping your employees buy with your matching Social Security tax: 

● Retirement Insurance?Benefits paid every month to retired workers?as early 

as age 62. 

● Disability Insurance?Benefits paid every month to workers of all ages who 

have a severe disability. In some cases, a young worker may qualify for a 

disability benefit with as little as one and one--half years of work. 

● Family Insurance?Benefits paid every month to the spouse and children of 

retired or disabled workers. 

● Survivors Insurance?Benefits paid every month to the widow or widower, and 
children, of a deceased worker. In some cases the family of a young deceased 

worker can receive these benefits even if the worker had as little as one and 

one--half years of work. 

● Medicare Insurance?Help with hospital bills, as well as limited coverage of 

skilled nursing facility stays, hospice care, and other medical services. 

Accurate reporting of W--2 information is more than just a tax matter because it has a 

direct bearing on the eligibility for, and amount of, any Social Security benefits 

payable to your employees and their families. That's why we always stress the 

importance of recording the right name, Social Security number, and wages for 

each of your employees. In addition to the productivity lost and administrative 

problems associated with correcting errors on W--2 forms, a genuine employee 

service is provided by accurate wage reporting. 

Guidelines To Help You Report Wages Accurately 

Here are tips to help you report wages accurately: 

● Ask to see the Social Security card for a new employee to make sure the name 

and Social Security number agree with the information on the job application; 

● Make sure the employer identification number (EIN) reported on the W--2, 

W--3, and 941 is the correct number issued by the Internal Revenue Service 

and that the EIN is consistent on all three forms; 

● Make sure that a W--3 accompanies each W--2 submission, and that the wage 

totals match; 

● Do not submit paper W--2 or W--3 forms if you or your third party processor 

already submitted ?magnetic media? reports to SSA; 

● Do not use a new W--2 or W--3 form to correct a previous report?use a W--2c 

or W--3c instead; and 

● If an employee changes his or her name due to marriage, divorce, or other 

reason, make sure he or she contacts Social Security immediately so we can 

update our records and issue a revised Social Security card. 

Telling Your Employees About Social Security 

Because you make a significant contribution to your employees' potential Social 

Security benefits, you may wish to remind them of your participation. We'd like to 

help you do that. 

Order Form
Please send me the following booklets: Note: If you need more than 100 copies of 

any publication, we will send you a ?camera--ready? copy so you can reproduce the 

quantity you need. 

Quantity Publications 

_______________ Social Security--An Employer's Investment

______________ 

English/ Spanish

Social Security--Your Taxes...What They're Paying For and 

Where The Money Goes (the companion to this leaflet, written 

for employees)

______________ 

English/ Spanish Request for Earnings And Benefit Estimate Statements

______________ 

(limit 5)

Software Specifications and Standards for Annual Wage 

Reporting (a guide to software and edit standards designed to 

improve the accuracy of wage reporting)

______________ 

(limit 5)

Help Your Employees Get What They Pay For (an 8 1/2" x 11" 

poster that provides employers with tips for improving the 

accuracy of wage reports)

_____________ 

(limit 10)

Social Security...You Get What You Pay For...And More(an 8 

1/2" x 11" poster that explains the Social Security benefits 

employees' taxes are paying for and shows them how to get an 

estimate of those benefits)

Your Name And Address:

Contact Name:___________________________________________________ 

Company Name:_________________________________________________ 

Mailing Address:_________________________________________________ 

City, State, ZIP:___________________________________________________ 

Telephone Number:______________________________________________ 

Please send this order blank to: 

Social Security Administration 

Public Information Distribution Center 

P.O. Box 17743 

Baltimore, MD 21235 
One way is to distribute copies of the leaflet Social Security?Your Taxes... What 

They're Paying For And Where The Money Goes to each of your employees. Another 

way is to provide your employees with the form Request For Earnings And Benefit 

Estimate Statement. Ask them to fill it out and send it back to Social Security. In 

return, they'll get a statement that contains a record of their earnings as posted to our 

files and an estimate of their retirement and disability benefits. They'll also receive an 

estimate of what their families might get if they die. 

It's a good idea to remind your employees to keep their W--2 forms and other wage 

records so they can verify the information on the Personal Earnings and Benefit 

Estimate Statement. If there's an error, we can use their wage records to correct our 

files. 

If you're interested in other pre--retirement planning tools for your employees, your 

local Social Security office may be able to help you with other information or 

services. 

How Social Security Helps Us All 

We hope this leaflet shows that employees and employers have a personal stake in 

Social Security. We also think it's important to consider the positive impact the 

program has on our country as a whole. In addition to a pact between workers and 

employers, Social Security represents a pact between generations?a financial and 

social commitment among people of all ages. It guarantees a monthly income to 

current recipients and ensures a base of financial support for future beneficiaries. We 

encourage employers to make their employees aware of the benefits Social Security 

provides, not only for each person but also for our entire society. 

Remember: Keep Social Security Numbers Private 

The Social Security number was established as a way to record earnings while a 

person is working and track benefits once a person is eligible for Social Security. 

Although the Social Security Administration discourages its use for other purposes, 

we cannot prevent other government agencies or private businesses from using the 

number for internal recordkeeping purposes. However, there is growing concern that 

an individual's right to privacy could be invaded if all records pertaining to an 

individual are kept under a single number. If your business uses the Social Security 

number for any purpose, please remember to keep each person's number private. For 

example, do not display it on employee identification badges or in any other public 

format. 

For More Information 
You can get recorded information 24 hours a day, including weekends and holidays, 

by calling Social Security's toll--free number, 1--800--772--1213. You can call for an 

appointment or to speak to a service representative between the hours of 7 a.m. and 7 

p.m. on business days. Our lines are busiest early in the week and early in the month 

so, if your business can wait, it's best to call at other times. 

People who are deaf or hard of hearing may call our toll--free ?TTY? number, 1--

800--325--0778, between 7 a.m. and 7 p.m. on business days. 

You can also reach us on the Internet. Type http://www.ssa.gov to access Social 

Security information. 

The Social Security Administration treats all calls confidentially ? whether they're 

made to our toll--free numbers or to one of our local offices. We also want to make 

sure that you receive accurate and courteous service. That's why we have a second 

Social Security representative monitor some incoming and outgoing telephone calls. 

Social Security Administration 

SSA Publication No. 05-10059 

January 1997 (Recycle prior editions)

ICN 463260