Social Security Taxes
As you likely know, every time you get a paycheck:
7.65% of your wages are subtracted from your paycheck and go to Social Security and Medicare (6.2% for Social Security and 1.45% for Medicare).
Your employer pays the same amount of tax.
President Trump's executive order halts the Social Security portion of your ordinary payroll taxes (6.2%).
Here are a few quick examples:
If you make $10/hour and work 40 hours/week, you will keep about $25 more per week or $446 from September 1st through December 31st.
If you make $15/hour, you will keep about $37 more per week, or $670 from September 1st through December 31st.
If you make $25/hour, you will keep about $62 more per week, or $1,116 from September 1st through December 31st.
As with all things in Washington, everything gets criticized. There are those that say the money won't be available quickly enough and would prefer straight stimulus payments. Others worry that the payroll tax cut only helps those that have a job and the ones that don't have a job need the help more. Then of course there is the worry of bankrupting Social Security, a perennial issue no matter what side of the aisle you support.
If you are in line to benefit from the President's order, you need to remember that it only suspends Social Security taxes versus making them go away forever. In order for that to happen, Congress would have to agree – and that's a tall order.
Yes, the President has said he's looking into the possibility of eliminating the suspended taxes if he's elected, but wiping your tax–suspension–slate clean might not be possible (and of course he might not be elected). Further, there are likely to be some companies that simply decide to continue withholding so that they arent faced with a really large bill later on.