Social Security and Medicare

Social Security is a federal benefit program funded by taxes on employees and their employers. Social Security and Medicare taxes are withheld from your paycheck and the university matches that amount, sends those taxes to the Internal Revenue Service, and reports your earnings to the Social Security Administration.

Benefits are paid primarily during retirement and are meant to supplement other income you have from pension plans, savings and investments. Your Social Security benefit is a percentage of your earnings, averaged over most of your working lifetime. Social Security also provides benefits for disabled workers and their dependents, and benefits for the surviving dependents of a worker who dies. The Medicare program provides health insurance for American citizens and permanent residents over age 65 and their spouses.

All employees, with the exception of those claiming student status or holding certain types of visas, pay Social Security (also known as FICA-OASDI or Federally Insured Contributions Act—Old Age, Survivor and Dependent Insurance) and Medicare (FICA-Medicare) taxes through payroll deduction.

The employee and the employer share of FICA-OASDI is based on a percentage up to the annual wage base limit, while the employee and employer share of FICA-Medicare is based on a percentage of all compensation. More information is available at the USC Payroll site.

Social Security taxes are automatically deducted from your paycheck. Make sure the name under which your earnings are reported is the same as the name on your Social Security card. The Social Security Administration sends annual statements to those working in Social Security-covered employment who are over age 25. You can request the statement online at any age, or contact USC Payroll.

When it comes time to retire, if you are age 65 or older you must contact your local Social Security for a Medicare application, or you may apply online. We recommended you apply 3 months in advance. Social Security will require USC to verify when your employer coverage began and is expected to end. Social Security will give you an employment verification form for Benefits to complete if you are past 65 years of age.

You do not have to sign up for Medicare Part B and Part D as long as you and/or your spouse are covered under an employer group health plan. Medicare recommends, however, that you sign up for Medicare Part A (hospital coverage) in order to get your information in the Medicare system. Part A is free in most cases. Medicare Part B (doctor services) will not be required until your group coverage ends.


Questions about the amount of Social Security taxes withheld from your paycheck should be directed to your HR/Payroll Analyst. For other questions, visit the Social Security Administration site, which includes information about when you can draw Social Security benefits and how to estimate your retirement benefits, including a benefit calculator that lets you use different parameters and assumptions about when you will stop working, your earnings projections, etc.

The site also includes an office locator so you can find a nearby Social Security field office. You may also call the Social Security general inquiry line at (800) 772-1213.

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