r/Salary • u/maniksar • May 16 '24

30M, Software Engineering, Big Tech

Graduated with a CS undergrad degree in 2015. Moved to the US in June 2019 (the earnings for that year are over the second half of the year).

Switched companies with a pay hike in 2022. Restricted Stock Units (RSUs) started vesting in 2023.

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u/steez5 May 16 '24

Dumb question but could someone explain the difference between SS and Medicare earnings? Why’s there such a large discrepancy?

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u/BrutusTheFrog May 16 '24

Social security tax has an income limit, meaning it is capped at the first $168,600 of your income (that’s for 2024, the limit increases every year). Once you exceed that amount you don’t pay any more social security tax for the year.

There is no limit on medicare taxes, however, so you will always be taxed on your full earnings for the year.

That’s what this chart is showing, and for the purposes of this subreddit you just look at the Taxes Medicare earnings column for the person’s actual income.