According to the assumption used in this text, employers are required to withhold social security taxes on the first earnings of each employee.
The Social Security tax is calculated as a percentage of gross wages that most employees, employers, and self-employed people must pay to fund the federal program. The percentage is 6.2%. There are certain groups of taxpayers who are exempt from paying social security tax. It is the obligation of the employer to withhold the correct amount of Social Security tax from every paycheck and forward it to the federal government on time.
The limit of the base of the wage is the maximum wage that's subject to the tax for that year. The Social Security tax is one of the taxes that all employers are required to withhold under the Federal Insurance Contributions Act (FICA). It is the responsibility of the employer to collect this amount and failure to collect can result in significant penalties.
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