Millionaires reach limit for Social Security payroll taxes for 2024

Most Americans can expect to pay Social Security payroll taxes throughout 2024.

But for top earners with gross annual wage income of $1 million, March 2 marks the date at which they will stop paying into the program, according to the Center for Economic and Policy Research.

The reason why those higher earners stop paying into the program a little more than two months into 2024 can be explained by the taxable maximum: the limit on earnings that are subject to the Social Security payroll tax.

In 2024, that threshold is $168,600. Therefore, workers with wages equal to, or larger than, that amount stop paying into the program once they reach that point.

Social Security payroll taxes require workers to contribute 6.2% of their pay to Social Security, which is matched by their employer.

Those who are taxed on the full $168,600 threshold will pay $10,453.20 to the program in 2024, with their employer also paying that same amount, according to the Social Security Administration.

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The taxable maximum is adjusted each year based on changes in the national average wage index. The portion of workers earning more than the taxable maximum has been around 6% since the 1980s, according to the Bipartisan Policy Center.

Yet, the percentage of total national earnings above the taxable maximum has increased, since income for top earners has grown faster than average wages, the Bipartisan Policy Center found. In 1977, the taxable maximum covered 90% of total national earnings. As of 2022, that had decreased to 82%.

Social Security faces a looming funding shortfall. Without action from Congress, the program may only pay full benefits until 2034, at which point there will be a benefit cut of at…