Social Security is funded by a 12.4 percent mandatory payroll tax on the first $90,000 of an employeeâ€(tm)s income ($90,000 is the FY2005 Income Cap). 6.2 percent of this tax is paid by the employee and 6.2 percent is paid by the employer.
Your employer deducts a certain amount from your paycheck to pay for taxes. This tax money funds many finance specific programs, including social security, health care and worker's disability. These programs might not mean a whole lot to you now, but you may likely benefit from them when you're older.