Office of the Chief Actuary 

Social Security AdministraƟon 

 Based on the 2023 Trustees Report Intermediate AssumpƟons 

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 contribuƟon and benefit 

base (taxable maximum), which limits the amount of earnings subject to payroll tax 

and credited for benefit computaƟon. For each provision, we provide an esƟmate of 

the financial effect on the OASDI program over the long-range period (the next 75 

years) and for the 75th year. We base all esƟmates on the intermediate 

assumpƟons described in the 2023 Trustees Report. 

We group these provisions as follows: 

 E1: Increase payroll tax rate, with no changes in the taxable 

maximum. 

 E2: Tax all earnings above the current-law taxable maximum. 

 E3: Tax a porƟon of earnings above the current-law taxable 

maximum. 

E Provisions AffecƟng Payroll Taxes 
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

E1.1 3.70 3.81 102% 88%

E1.2 4.49 7.51 125% 173%

E1.4 1.50 2.01 41% 46%

E1.8 0.55 0.61 15% 14%

E1.9 1.79 2.41 50% 56%

E1.10 0.89 1.01 25% 23%

E2.1 2.54 2.60 70% 60%

E2.2 1.97 1.60 55% 37%

E2.4 2.37 2.49 66% 57%

E2.5 2.47 2.60 68% 60%

E2.11 2.25 2.27 62% 52%

Increase the payroll tax rate (currently 12.4 percent) to 16.2 percent in 

2024 and later.

Increase the payroll tax rate (currently 12.4 percent) to 16.2 percent in 

2034-2063, and to 20.0 percent in years 2064 and later.

Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage 

point each year from 2029-2048, until the rate reaches 14.4 percent in 

2048 and later.

Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage 

point each year from 2026-2031, until the rate reaches 13.0 percent for 

2031 and later.

Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage 

point each year from 2027-2050, until the rate reaches 14.8 percent in 

2050 and later.

Increase the payroll tax rate by 0.1 percentage point per year for 2025 

through 2034 so that it equals 13.4 percent for 2034 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.

Category E: Payroll Taxes (including maximum taxable) (2023 Trustees Report intermediate assumptions)

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

Eliminate the taxable maximum in years 2024 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.

Eliminate the taxable maximum in years 2024 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.

Eliminate the taxable maximum for years 2030 and later (phased in 2024-

2030), 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 2023 that were in excess of that year's 

current-law taxable maximum; (2) a new bend point equal to $9,360 in 

2024, indexed by wages after 2024; and (3) formula factors of 3 percent 

and 0.25 percent below and above the new bend point, respectively.

Apply 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. Do not provide benefit credit for additional earnings taxed.

Eliminate the taxable maximum in years 2029 and later. Phase in 

elimination by taxing all earnings above the current-law taxable maximum 

at: 2.48 percent in 2025, 4.96 percent in 2026, and so on, up to 12.40 

percent in 2029. 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 2024 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+.

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

E2.12 2.05 2.22 57% 51%

E2.13 2.18 2.47 60% 57%

E2.14 2.37 2.47 66% 57%

E2.15 2.28 2.40 63% 55%

E2.16 2.33 2.40 65% 55%

E2.17 2.26 2.60 63% 60%

Apply OASDI 12.4 percent payroll tax rate on earnings above $400,000 

starting in 2025, 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 2024 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+.

Apply OASDI 12.4 percent payroll tax rate on earnings above $250,000 

starting in 2025, 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 2024 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+.

Apply OASDI 12.4 percent payroll tax rate on earnings above $300,000 

starting in 2025, 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 2024 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+.

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. Increase the computed level of the SSA 

average wage index for years after 2023 by amounts ranging from 0.6 

percent for 2024 to 0.9 percent for 2034 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 

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+.

Apply 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. Do not provide benefit credit for additional earnings taxed.

Eliminate the taxable maximum in years 2035 and later. Phase in 

elimination by taxing all earnings above the current-law taxable maximum 

at: 1.24 percent in 2026, 2.48 percent in 2027, and so on, up to 12.40 

percent in 2035. 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.

Category E: Payroll Taxes (including maximum taxable) (continued)

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

E2.18 2.16 2.47 60% 57%

E3.1 0.69 0.40 19% 9%

E3.2 1.07 1.18 30% 27%

E3.5 0.59 0.45 16% 10%

E3.6 0.83 1.18 23% 27%

E3.7 0.66 0.76 18% 18%

E3.8 0.19 0.14 5% 3%

E3.9 0.26 0.30 7% 7%

E3.10 0.14 0.10 4% 2%

E3.11 0.19 0.22 5% 5%

Apply the combined OASDI payroll tax rate on covered earnings above 

$400,000 paid in 2025 and later, and tax all covered earnings once the 

current-law taxable maximum exceeds $400,000. Increase the computed 

level of the AWI for years after 2024 by amounts ranging from 0.5 

percent for 2025 to 0.9 percent for 2047 and later. Credit the additional 

earnings taxed for benefit purposes by: (a) calculating a second average 

indexed monthly earnings (AIME+) reflecting only earnings taxed above 

the current-law taxable maximum, (b) applying a 1 percent factor on this 

newly computed AIME+ to develop a second component of the PIA, and 

(c) adding this second component to the current-law PIA.

Category E: Payroll Taxes (including maximum taxable) (continued)

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

Beginning in 2031, apply 2 percent payroll tax rate on earnings over the 

wage-indexed equivalent of $200,000 in 2017 (about $348,300 in 2031), 

with the threshold wage-indexed after 2031. Do not provide benefit 

credit for additional earnings taxed.

Beginning in 2031, apply 2 percent payroll tax rate on earnings over the 

wage-indexed equivalent of $300,000 in 2017 (about $522,300 in 2031), 

with the threshold wage-indexed after 2031. 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.

Beginning in 2031, apply 2 percent payroll tax rate on earnings over the 

wage-indexed equivalent of $300,000 in 2017 (about $522,300 in 2031), 

with the threshold wage-indexed after 2031. Do not provide benefit 

credit for additional earnings taxed.

Increase the taxable maximum such that 90 percent of earnings would be 

subject to the payroll tax (phased in 2024-2033). Provide benefit credit 

for earnings up to the revised taxable maximum.

Increase the taxable maximum such that 90 percent of earnings would be 

subject to the payroll tax (phased in 2024-2033). Do not provide benefit 

credit for additional earnings taxed.

Increase the taxable maximum each year by an additional 2 percent 

beginning in 2024 until taxable earnings equal 90 percent of covered 

earnings. Provide benefit credit for earnings up to the revised taxable 

maximum.

Increase the taxable maximum each year by an additional 2 percent 

beginning in 2026 until taxable earnings equal 90 percent of covered 

earnings. Do not provide benefit credit for additional earnings taxed.

Increase the taxable maximum by an additional 2 percent per year 

beginning in 2025 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.

Beginning in 2031, apply 2 percent payroll tax rate on earnings over the 

wage-indexed equivalent of $200,000 in 2017 (about $348,300 in 2031), 

with the threshold wage-indexed after 2031. 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.

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

E3.12 0.11 0.08 3% 2%

E3.13 0.16 0.18 4% 4%

E3.14 1.46 1.19 40% 27%

E3.15 1.37 1.13 38% 26%

E3.16 0.32 0.33 9% 8%

E3.17 0.98 1.18 27% 27%

E3.18 0.55 0.48 15% 11%

E3.19 1.02 1.05 28% 24%

Beginning in 2031, apply 2 percent payroll tax rate on earnings over the 

wage-indexed equivalent of $400,000 in 2017 (about $696,600 in 2031), 

with the threshold wage-indexed after 2031. 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.

Beginning in 2031, apply 2 percent payroll tax rate on earnings over the 

wage-indexed equivalent of $400,000 in 2017 (about $696,600 in 2031), 

with the threshold wage-indexed after 2031. Do not provide benefit 

credit for additional earnings taxed.

Eliminate the taxable maximum for the employer payroll tax (6.2 percent) 

beginning in 2024. For the employee payroll tax (6.2 percent) and for 

benefit credit purposes, beginning in 2024, increase the taxable maximum 

by an additional 2 percent per year until taxable earnings equal 90 

percent of covered earnings.

Category E: Payroll Taxes (including maximum taxable) (continued)

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

Increase the taxable maximum such that 90 percent of earnings are 

subject to the payroll tax (phased in 2024-2033). In addition, apply a tax 

rate of 6.2 percent for earnings above the revised taxable maximum 

(phased in from 2024-2033). Provide benefit credit for earnings taxed up 

to the revised taxable maximum.

Beginning in 2025, apply 4 percent payroll tax rate on earnings above the 

wage-indexed equivalent of $400,000 in 2015 (about $589,500 in 2025), 

with the threshold wage-indexed after 2025. 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 $589,500 and $736,800 in 2025 (with thresholds wage-indexed 

after 2025); and (2) a formula factor of 2 percent on this newly computed 

AIME+.

Beginning in 2025, 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.

Increase the taxable maximum linearly over 4 years to $279,900 for 2028. 

After 2028, index the taxable maximum to AWI plus 0.5 percentage point. 

Apply benefit credit on additional earnings taxed.

Increase the taxable maximum such that 90 percent of earnings would be 

subject to the payroll tax (phased in linearly from 2025-2030). 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+.

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions