Million-dollar earners have stopped paying into Social Security for 2026

In 2026, earnings up to $184,500 are subject to Social Security payroll taxes.

As of Monday, individuals with $1 million in annual wage and salary earnings have stopped paying into the program for this calendar year, according to the Center for Economic and Policy Research.

Wealthier individuals stop paying into the program even sooner. Billionaire tech magnate Elon Musk may have paid all of his Social Security taxes for the year on New Year’s Day, depending on how his income is taxed, labor economist Teresa Ghilarducci has estimated.

Workers and employers each pay 6.2% of wages toward Social Security through payroll taxes. They also each contribute 1.45% for Medicare — and unlike Social Security, Medicare taxes apply to all earnings with no income cap. There’s also a 0.9% Medicare surcharge for high earners.

Self-employed workers are subject to the full 12.4% rate for Social Security and 2.9% for Medicare, although they can also claim an above-the-line deduction of half of their FICA taxes.

Amid calls for higher taxes on the rich and a looming Social Security funding shortfall, some advocates and lawmakers are pushing to raise the payroll tax cap so that high earners pay more into the program.

In the future, Social Security may not be able to pay benefits as intended, said Hayley Brown, a labor and disability researcher at the Center for Economic and Policy Research, a left-leaning think tank.

“Meanwhile, we have people who are capable of paying into the system throughout the year who stop before three months of the year have gone by,” Brown said.

Yet because money continues to come into the program through payroll taxes, benefits will not run out entirely. Instead, the latest projections from the Social Security Administration’s actuaries find that the trust fund the program relies on to pay retirement benefits may run out in 2032, when monthly payments would be reduced by 24% unless Congress takes action to address the shortfall.

Raising the Social Security payroll tax cap is among the options lawmakers may consider.

Research shows that choice is popular among consumers. Raising the payroll tax cap for earnings over $400,000, while not increasing benefits for those extra contributions, was the most popular of all the policy options, according to a 2025 survey from the National Academy of Social Insurance, AARP, National Institute on Retirement Security and U.S. Chamber of Commerce. The group of retirement policy and business organizations polled 2,243 Americans.

Other popular choices identified through that research were gradually raising the payroll tax rate from 6.2% to 7.2% and keeping age 67 as the full retirement age.

Earnings inequality has contributed to Social Security’s current trust fund shortfall, according to recent research from the Roosevelt Institute, a liberal think tank, student network and nonprofit partner to the Franklin D. Roosevelt Presidential Library and Museum.

The share of earnings subject to Social Security payroll taxes was 90% in 1983. Yet the payroll tax did not rise fast enough to maintain that 90% coverage, according to the Roosevelt Institute. In 2000, it was approximately 82.5% and has since stayed at about that level, with some fluctuations, Roosevelt Institute research found.

About 6% of workers have earnings above the cap, a share that has held steady. But those workers’ real earnings grew by an “unexpectedly large” average of 62% from 1983 through 2000, according to the Roosevelt Institute. Meanwhile, the remaining 94% of workers with earnings below the cap saw their average real earnings go up just 17% during those years.

Eliminating the taxable maximum starting this year and not providing a benefit credit for tax contributions above the earnings threshold would fix 67% of the long-range actuarial balance, according to the Social Security Administration. Other variations of that change may not go as far, depending on factors including income thresholds that are taxed, such as $250,000 or $400,000 and above, and whether those contributions would result in higher benefit payments.

Had the payroll tax cap been eliminated years ago, the results would have gone further toward shoring up the program, Jason Fichtner, former deputy commissioner at the Social Security Administration and current executive director of the LIMRA Alliance for Lifetime Income, said during a March 3 panel discussion at the National Institute on Retirement Security annual retirement policy conference in Washington, D.C.

“If we had just raised the taxable maximum, got rid of the cap, just that one policy … that would have put us on 75-year solvency 15 years ago,” Fichtner said. “We’ve lost that one major option.”

Not everyone agrees with eliminating the Social Security payroll tax cap. The increase would impact upper-middle-class individuals and families, not just the rich, according to the Manhattan Institute, a conservative think tank. It would also limit the ability to raise taxes to pay for other initiatives, such as Medicare, which likewise faces a funding shortfall, it found.

Yet other experts and voters say the change is at the top of their wish lists for Social Security reform.

“It seems like the fairest and most straightforward way to shore up Social Security’s finances, and it also speaks to Social Security’s status as a social insurance program,” Brown said.

CEPR’s website includes a calculator to determine when individuals stop paying into the program this year based on their earnings.

“I hope that people use the tool not just to see when they stop paying in, but to try to experiment and see what it would be like for somebody making $200,000, $300,000 … and then try to reconcile that with their idea of what they think a fair system would look like,” Brown said.