How do railroad retirement and social security payroll taxes compare?
Railroad retirement payroll taxes, like railroad retirement benefits, are calculated on a two-tier basis. Rail employees and employers pay tier I taxes at the same rate as social security taxes, 7.65 percent, consisting of 6.20 percent for retirement on earnings up to $106,800 in 2009 and 1.45 percent for Medicare hospital insurance on all earnings. In addition, rail employees and employers both pay tier II taxes which are used to finance railroad retirement benefit payments over and above social security levels. In 2009, the tier II tax rate on employees is 3.90 percent and on rail employers it is 12.10 percent on employee earnings up to $79,200. 9. How much are regular railroad retirement taxes for an employee earning $106,800 in 2009 compared to social security taxes? The maximum amount of regular railroad retirement taxes that an employee earning $106,800 can pay in 2009 is $11,259, compared to $8,170.20 under social security. For railroad employers, the maximum annual regular reti
