
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC3111]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                      Subtitle C--Employment Taxes
 
             CHAPTER 21--FEDERAL INSURANCE CONTRIBUTIONS ACT
 
                     Subchapter B--Tax on Employers
 
Sec. 3111. Rate of tax


(a) Old-age, survivors, and disability insurance

    In addition to other taxes, there is hereby imposed on every 
employer an excise tax, with respect to having individuals in his 
employ, equal to the following percentages of the wages (as defined in 
section 3121(a)) paid by him with respect to employment (as defined in 
section 3121(b))--


    In cases of wages paid during:             The rate shall be:

    1984, 1985, 1986, or 1987........  5.7 percent
    1988 or 1989.....................  6.06 percent
    1990 or thereafter...............  6.2 percent.


(b) Hospital insurance

    In addition to the tax imposed by the preceding subsection, there is 
hereby imposed on every employer an excise tax, with respect to having 
individuals in his employ, equal to the following percentages of the 
wages (as defined in section 3121(a)) paid by him with respect to 
employment (as defined in section 3121(b))--
        (1) with respect to wages paid during the calendar years 1974 
    through 1977, the rate shall be 0.90 percent;
        (2) with respect to wages paid during the calendar year 1978, 
    the rate shall be 1.00 percent;
        (3) with respect to wages paid during the calendar years 1979 
    and 1980, the rate shall be 1.05 percent;
        (4) with respect to wages paid during the calendar years 1981 
    through 1984, the rate shall be 1.30 percent;
        (5) with respect to wages paid during the calendar year 1985, 
    the rate shall be 1.35 percent; and
        (6) with respect to wages paid after December 31, 1985, the rate 
    shall be 1.45 percent.

(c) Relief from taxes in cases covered by certain international 
        agreements

    During any period in which there is in effect an agreement entered 
into pursuant to section 233 of the Social Security Act with any foreign 
country, wages received by or paid to an individual shall be exempt from 
the taxes imposed by this section to the extent that such wages are 
subject under such agreement to taxes or contributions for similar 
purposes under the social security system of such foreign country.

(Aug. 16, 1954, ch. 736, 68A Stat. 416; Sept. 1, 1954, ch. 1206, title 
II, Sec. 208(c), 68 Stat. 1094; Aug. 1, 1956. ch. 836, title II, 
Sec. 202(c), 70 Stat. 845; Pub. L. 85-840, title IV, Sec. 401(c), Aug. 
28, 1958, 72 Stat. 1042; Pub. L. 87-64, title II, Sec. 201(c), June 30, 
1961, 75 Stat. 141; Pub. L. 89-97, title I, Sec. 111(c)(6), title III, 
Sec. 321(c), July 30, 1965, 79 Stat. 343, 396; Pub. L. 90-248, title I, 
Sec. 109(a)(3), (b)(3), Jan. 2, 1968, 81 Stat. 836, 837; Pub. L. 92-5, 
title II, Sec. 204(a)(2), Mar. 17, 1971, 85 Stat. 11; Pub. L. 92-336, 
title II, Sec. 204(a)(3), (b)(3), July 1, 1972, 86 Stat. 421, 422; Pub. 
L. 92-603, title I, Sec. 135(a)(3), (b)(3), Oct. 30, 1972, 86 Stat. 
1363, 1364; Pub. L. 93-233, Sec. 6(a)(2), (b)(3), Dec. 31, 1973, 87 
Stat. 954, 955; Pub. L. 94-455, title XIX, Sec. 1903(a)(1), Oct. 4, 
1976, 90 Stat. 1806; Pub. L. 95-216, title I, Sec. 101(a)(2), (b)(2), 
title III, Secs. 315(b), 317(b)(2), Dec. 20, 1977, 91 Stat. 1511, 1512, 
1537, 1540; Pub. L. 98-21, title I, Sec. 123(a)(2), Apr. 20, 1983, 97 
Stat. 88; Pub. L. 100-203, title IX, Sec. 9006(b)(1), Dec. 22, 1987, 101 
Stat. 1330-289; Pub. L. 100-647, title VIII, Sec. 8016(a)(5), Nov. 10, 
1988, 102 Stat. 3793.)

                       References in Text

    Section 233 of the Social Security Act, referred to in subsec. (c), 
is classified to section 433 of Title 42, The Public Health and Welfare.


                               Amendments

    1988--Subsecs. (a), (b). Pub. L. 100-647 made technical correction 
to directory language of Pub. L. 100-203, Sec. 9006(b)(1), see 1987 
Amendment note below.
    1987--Subsecs. (a), (b). Pub. L. 100-203, as amended by Pub. L. 100-
647, struck out ``and (t)'' after ``3121(a)'' in introductory 
provisions.
    1983--Subsec. (a). Pub. L. 98-21 substituted table of rates for 
pars. (1) to (7) which had imposed a tax on every employer (1) with 
respect to wages paid during the calendar years 1974 through 1977 at the 
rate of 4.95 percent, (2) with respect to wages paid during the calendar 
year 1978 at the rate of 5.05 percent, (3) with respect to wages paid 
during the calendar years 1979 and 1980 at the rate of 5.08 percent, (4) 
with respect to wages paid during the calendar year 1981 at the rate of 
5.35 percent, (5) with respect to wages paid during the calendar years 
1982 through 1984 at the rate of 5.40 percent, (6) with respect to wages 
paid during the calendar years 1985 through 1989 at the rate of 5.70 
percent, and (7) with respect to wages paid after Dec. 31, 1989, at the 
rate of 6.20 percent.
    1977--Subsec. (a). Pub. L. 95-216, Secs. 101(a)(2), 315(b), 
substituted ``(as defined in section 3121(a) and (t))'' for ``(as 
defined in section 3121(a))'' in provisions preceding par. (1), 
substituted ``1974 through 1977'' for ``1974 through 2010'' in par. (1), 
substituted ``wages paid during the calendar year 1978, the rate shall 
be 5.05 percent'' for ``wages paid after December 31, 2010, the rate 
shall be 5.95 percent'' in par. (2), and added pars. (3) to (7).
    Subsec. (b). Pub. L. 95-216, Secs. 101(b)(2), 315(b), substituted 
``(as defined in section 3121(a) and (t))'' for ``(as defined in section 
3121(a))'' in provisions preceding par. (1), substituted ``wages paid 
during the calendar year 1978, the rate shall be 1.00 percent'' for 
``wages paid during the calendar years 1978 through 1980, the rate shall 
be 1.10 percent'', in par. (2), substituted ``wages paid during the 
calendar years 1979 and 1980, the rate shall be 1.05 percent'' for wages 
paid during the calendar years 1981 through 1985, the rate shall be 1.35 
percent'' in par. (3), substituted ``wages paid during the calendar 
years 1981 through 1984, the rate shall be 1.30 percent'' for ``wages 
paid after December 31, 1985, the rate shall be 1.50 percent'' in par. 
(4), and added pars. (5) and (6).
    Subsec. (c). Pub. L. 95-216, Sec. 317(b)(2), added subsec. (c).
    1976--Subsec. (a). Pub. L. 94-455, Sec. 1903(a)(1)(A), redesignated 
pars. (5) and (6) as (1) and (2). Former pars. (1) to (4), which related 
to a tax rate of 3.8 percent with respect to wages received during the 
taxable year 1968, a tax rate of 4.2 percent with respect to wages 
received during the calendar year 1969 and 1970, a tax rate of 4.6 
percent with respect to wages received during the calendar years 1971 
and 1972, and a tax rate of 4.85 percent with respect to wages received 
during the calendar year 1973, respectively, were struck out.
    Subsec. (b). Pub. L. 94-455, Sec. 1903(a)(1)(B), redesignated pars. 
(3) to (6) as (1) to (4), respectively. Former pars. (1) and (2), which 
related to a tax rate of .60 percent with respect to wages received 
during the calendar years 1968, 1969, 1970, 1971, and 1972 and a tax 
rate of 1.0 percent with respect to wages received during the calendar 
year 1973, respectively, were struck out.
    1973--Subsec. (a)(4). Pub. L. 93-233, Sec. 6(a)(2), struck out 
provision for application of 4.85 percent rate of tax during calendar 
years 1974, 1975, 1976, and 1977.
    Subsec. (a)(5). Pub. L. 93-233, Sec. 6(a)(2), increased rate of tax 
from 4.80 percent to 4.95 percent and substituted calendar year ``1974'' 
to ``1978'' as initial year for application of such rate.
    Subsec. (a)(6). Pub. L. 93-233, Sec. 6(a)(2), increased rate of tax 
from 5.85 percent to 5.95 percent.
    Subsec. (b)(2). Pub. L. 93-233, Sec. 6(b)(3), struck out provision 
for application of 1.0 percent rate of tax during calendar years 1974, 
1975, 1976, and 1977.
    Subsec. (b)(3). Pub. L. 93-233, Sec. 6(b)(3), incorporated former 
provision of par. (2) for taxation of wages received during calendar 
years 1974, 1975, 1976, and 1977, decreased the applicable rate of tax 
from 1.0 percent to 0.90 percent, and struck out provision for 1.25 
percent rate of tax for calendar years 1978, 1979, and 1980.
    Subsec. (b)(4). Pub. L. 93-233, Sec. 6(b)(3), incorporated former 
provision of par. (3) for taxation of wages received during calendar 
years 1978, 1979, and 1980, decreased the applicable rate of tax from 
1.25 percent to 1.10 percent, and struck out provision for 1.35 percent 
rate of tax for calendar years 1981, 1982, 1983, 1984, and 1985.
    Subsec. (b)(5). Pub. L. 93-233, Sec. 6(b)(3), incorporated former 
provision of par. (4) for taxation of wages received during calendar 
years 1981 through 1985 at applicable 1.35 percent rate of tax and 
struck out provision for 1.45 percent rate of tax for wages received 
after Dec. 31, 1985.
    Subsec. (b)(6). Pub. L. 93-233, Sec. 6(b)(3), incorporated former 
provision of par. (5) for taxation of wages received after Dec. 31, 1985 
and increased the applicable rate of tax from 1.45 percent to 1.50 
percent.
    1972--Subsec. (a)(3). Pub. L. 92-603, Sec. 135(a)(3)(A), substituted 
``the calendar years 1971 and 1972'' for ``any of the calendar years 
1971 through 1977''.
    Subsec. (a)(3) to (5). Pub. L. 92-336, Sec. 204(a)(3), substituted 
``any of the calendar years 1971 through 1977'' for ``the calendar years 
1971 and 1972'' in par. (3), ``any of the calendar years 1978 through 
2010'' for ``the calendar years 1973, 1974, and 1975'' and ``4.5'' for 
``5.0'' in par. (4), and ``December 31, 2010'' for ``December 31, 1975'' 
and ``5.35'' for ``5.15'' in par. (5).
    Subsec. (a)(4). Pub. L. 92-603, Sec. 135(a)(3)(B), substituted 
``received during the calendar years 1973, 1974, 1975, 1976, and 1977, 
the rate shall be 4.85 percent;'' for ``received during any of the 
calendar years 1978 through 2010, the rate shall be 4.5 percent; and''.
    Subsec. (a)(5). Pub. L. 92-603, Sec. 135(a)(3)(B), substituted 
``received during the calendar years 1978 through 2010, the rate shall 
be 4.80 percent; and'' for ``received after December 31, 2010, the rate 
shall be 5.35 percent''.
    Subsec. (a)(6). Pub. L. 92-603, Sec. 135(a)(3)(B), added par. (6).
    Subsec. (b)(2). Pub. L. 92-603, Sec. 135(b)(3), increased rate to 
1.0 percent from 0.9 percent.
    Subsec. (b)(2) to (5). Pub. L. 92-336, Sec. 204(b)(3), inserted 
references to 1976 and 1977 and substituted ``0.9'' for ``0.65'' in par. 
(2), substituted references for the calendar years 1978 through 1985 for 
references to the calendar years 1976 through 1979 and substituted 
``1.0'' for ``0.70'' in par. (3), substituted references for the 
calendar years 1986 through 1992 for references to the calendars 1980 
through 1986 and substituted ``1.1'' for ``0.80'' in par. (4), and 
substituted ``1992'' and ``1986'' and ``1.2'' for ``0.9'' in par. (5).
    Subsec. (b)(3). Pub. L. 92-603, Sec. 135(b)(3), substituted ``and 
1980, the rate shall be 1.25 percent'' for ``1980, 1981, 1982, 1983, 
1984, and 1985, the rate shall be 1.0 percent''.
    Subsec. (b)(4). Pub. L. 92-603, Sec. 135(b)(3), substituted ``1981, 
1982, 1983, 1984, and 1985, the rate shall be 1.35 percent'' for ``1986, 
1987, 1988, 1989, 1990, 1991, and 1992, the rate shall be 1.1 percent''.
    Subsec. (b)(5). Pub. L. 92-603, Sec. 135(b)(3), substituted ``1985, 
the rate shall be 1.45 percent'' for ``1992, the rate shall be 1.2 
percent''.
    1971--Subsec. (a)(4). Pub. L. 92-5 substituted ``with respect to 
wages paid during the calendar years 1973, 1974, and 1975, the rate 
shall be 5.0 percent; and'' for ``with respect to wages paid after 
December 31, 1972, the rate shall be 5.0 percent''.
    Subsec. (a)(5). Pub. L. 92-5 added par. (5).
    1968--Subsec. (a)(1) to (4). Pub. L. 90-248, Sec. 109(a)(3), 
substituted ``1968'' and ``3.8'' for ``1966'' and ``3.85'' in par. (1) 
and ``1969 and 1970'' and ``4.2'' for ``1967 and 1968'' and ``3.9'' in 
par. (2), struck out reference to calendar years 1969 and 1970 from par. 
(3) and substituted therein ``4.6'' for ``4.4'', and substituted ``5.0'' 
for ``4.85'' in par. (4).
    Subsecs. (b)(1) to (5). Pub. L. 90-248, Sec. 109(b)(3), struck out 
par. (1) provision for employer rate of 0.35 percent of wages paid with 
respect to employment during calendar year 1966, redesignated pars. (2) 
to (6) as (1) to (5), struck out reference to ``1967'' in such par. (1) 
and increased the rate by 0.10 percent to 0.60, 0.65, 0.70, 0.80, and 
0.90 in pars. (1) to (5), respectively.
    1965--Pub. L. 89-97, Sec. 321(c), divided the total excise tax 
imposed under the entire section upon employers through a tax equal to 
percentages of wages paid by him into two separate taxes by dividing the 
section into subsecs. (a) and (b), with subsec. (a) reflecting the tax 
for old-age, survivors, and disability insurance, and subsec. (b) 
reflecting the tax for hospital insurance, but, in the case of subsec. 
(b), without regard to the provisions of section 3121(b)(9) insofar as 
it relates to employees; increased from 4\1/8\ percent to 4.20 percent 
the rate of total tax imposed by the entire section upon wages paid 
during calendar year 1966 (resulting from a tax of 3.85 percent under 
subsec. (a) and 0.35 percent under subsec. (b)), increased from 4\1/8\ 
percent to 4.40 percent the rate of total tax imposed by the entire 
section upon wages paid during calendar year 1967 (resulting from a tax 
of 3.9 percent under subsec. (a) and 0.50 percent under subsec. (b)), 
reduced from 4\5/8\ percent to 4.40 percent the rate of total tax 
imposed by the entire section upon wages paid during calendar year 1968 
(resulting from a tax of 3.9 percent under subsec. (a) and 0.50 percent 
under subsec. (b)), increased from 4\5/8\ percent to 4.90 percent the 
rate of total tax imposed by the entire section upon wages paid during 
the calendar years 1969, 1970, 1971, and 1972 (resulting from a tax of 
4.4 percent under subsec. (a) and 0.50 percent under subsec. (b)), 
increased from 4\5/8\ percent to 5.40 percent the rate for calendar 
years 1973, 1974, and 1975 (resulting from a tax of 4.85 percent under 
subsec. (a) and 0.55 percent under subsec. (b)), increased from 4\5/8\ 
percent to 5.45 percent the rate for calendar years 1976, 1977, 1978, 
and 1979 (resulting from a tax of 4.85 percent under subsec. (a) and 
0.60 percent under subsec. (b)), increased from 4\5/8\ percent to 5.55 
percent the rate for calendar years 1980 through 1986 (resulting from a 
tax of 4.85 percent under subsec. (a) and 0.70 percent under subsec. 
(b)), and increased the rate from 4\5/8\ percent to 5.65 percent for 
calendar years after December 31, 1986 (resulting from a tax of 4.85 
percent under subsec. (a) and 0.80 percent under subsec. (b)).
    Subsec. (b). Pub. 89-97, Sec. 111(c)(6), struck out ``, but without 
regard to the provisions of paragraph (9) thereof insofar as it relates 
to employees'' after ``as defined in section 3121(b)''.
    1961--Pub. L. 87-64 increased rate of tax for calendar year 1962 
from 3 to 3\1/8\ percent, calendar years 1963 to 1965, inclusive, from 
3\1/2\ to 3\5/8\ percent, calendar years 1966 and 1967 from 4 to 4\1/8\ 
percent, calendar year 1968 from 4 to 4\5/8\ percent, and for calendar 
years after December 31, 1968, from 4\1/2\ to 4\5/8\ percent.
    1958--Pub. L. 85-840 increased rate of tax by substituting 
provisions imposing a tax of 2\1/2\ percent for calendar year 1959, 3 
percent for calendar years 1960-62, 3\1/2\ percent for calendar years 
1963-65, 4 percent for calendar years 1966-68, and 4\1/2\ percent for 
calendar years beginning after Dec. 31, 1968, for provisions which 
imposed a tax of 2\1/4\ percent for calendar years 1957-59, 2\3/4\ 
percent for calendar years 1960-64, 3\1/4\ percent for calendar years 
1965-69, 3\3/4\ percent for calendar years 1970-74, and 4\1/4\ percent 
for calendar years beginning after Dec. 31, 1974.
    1956--Act Aug. 1, 1956, increased rate of tax with respect to wages 
paid during calendar years 1957 to 1959, and for all calendar years 
thereafter, by one-quarter percent.
    1954--Act Sept. 1, 1954, increased 3\1/4\ percent rate of tax for 
calendar year 1970 and subsequent years to 3\1/2\ percent for calendar 
years 1970 to 1974 and 4 percent for 1975 and subsequent years.


                    Effective Date of 1988 Amendment

    Section 8016(b) of Pub. L. 100-647 provided that:
    ``(1) Except as provided in paragraph (2), the amendments made by 
this section [amending this section, sections 3121 and 3306 of this 
title, and sections 405, 410, and 411 of Title 42, The Public Health and 
Welfare] shall be effective on the date of the enactment of this Act 
[Nov. 10, 1988].
    ``(2) Any amendment made by this section to a provision of a 
particular Public Law which is referred to by its number, or to a 
provision of the Social Security Act [42 U.S.C. 301 et seq.] or the 
Internal Revenue Code of 1986 as added or amended by a provision of a 
particular Public Law which is so referred to, shall be effective as 
though it had been included or reflected in the relevant provisions of 
that Public Law at the time of its enactment.''


                    Effective Date of 1987 Amendment

    Section 9006(c) of Pub. L. 100-203 provided that: ``The amendments 
made by this section [amending this section and section 3121 of this 
title] shall apply with respect to tips received (and wages paid) on and 
after January 1, 1988.''


                    Effective Date of 1983 Amendment

    Amendment by Pub. L. 98-21 applicable to remuneration paid after 
Dec. 31, 1983, see section 123(a)(3) of Pub. L. 98-21, set out as a note 
under section 3101 of this title.


                    Effective Date of 1977 Amendment

    Amendment by section 101(a)(2), (b)(2) of Pub. L. 95-216 applicable 
with respect to remuneration paid or received, and taxable years 
beginning, after 1977, see section 104 of Pub. L. 95-216, set out as a 
note under section 1401 of this title.
    Section 315(c) of Pub. L. 95-216 provided that: ``The amendments 
made by this section [amending this section and section 3121 of this 
title] shall apply with respect to wages paid with respect to employment 
performed in months after December 1977.''


                    Effective Date of 1976 Amendment

    Amendment by Pub. L. 94-455 applicable with respect to wages paid 
after Dec. 31, 1976, see section 1903(d) of Pub. L. 94-455, set out as a 
note under section 3101 of this title.


                    Effective Date of 1973 Amendment

    Amendment by Pub. L. 93-233 applicable only with respect to 
remuneration paid after December 31, 1973, see section 6(c) of Pub. L. 
93-233, set out as a note under section 1401 of this title.


                    Effective Date of 1972 Amendments

    Amendment by Pub. L. 92-603 applicable only with respect to 
remuneration paid after Dec. 31, 1972, see section 135(c) of Pub. L. 92-
603, set out as a note under section 1401 of this title.
    Amendment by Pub. L. 92-336 applicable only with respect to 
remuneration paid after December 31, 1972, see section 204(c) of Pub. L. 
92-336, set out as a note under section 1401 of this title.


                    Effective Date of 1971 Amendment

    Amendment by Pub. L. 92-5 applicable only with respect to 
remuneration paid after Dec. 31, 1971, see section 204(b) of Pub. L. 92-
5, set out as a note under section 3101 of this title.


                    Effective Date of 1968 Amendment

    Amendment by Pub. L. 90-248 applicable only with respect to 
remuneration paid after Dec. 31, 1967, see section 109(c) of Pub. L. 90-
248, set out as a note under section 1401 of this title.


                    Effective Date of 1965 Amendment

    Amendment by section 111(c)(6) of Pub. L. 89-97 applicable to 
calendar year 1966 or to any subsequent calendar year but only if by 
October 1 immediately preceding such calendar year the Railroad 
Retirement Tax Act (section 3201 et seq. of this title) provides for a 
maximum amount of monthly compensation taxable under such Act during all 
months of such calendar year equal to one-twelfth of maximum wages which 
Federal Insurance Contributions Act (section 3101 et seq. of this title) 
provides may be counted for such calendar year, see section 111(e) of 
Pub. L. 89-97, set out as an Effective Date note under section 1395i-1 
of Title 42, The Public Health and Welfare.
    Amendment by section 321(c) of Pub. L. 89-97 applicable with respect 
to remuneration paid after December 31, 1965, see section 321(d) of Pub. 
L. 89-97, set out as a note under section 1401 of this title.


                    Effective Date of 1961 Amendment

    Amendment by Pub. L. 87-64 applicable with respect to remuneration 
paid after Dec. 31, 1961, see section 201(d) of Pub. L. 87-64, set out 
as a note under section 1401 of this title.


                    Effective Date of 1958 Amendment

    Amendment by Pub. L. 85-840 applicable with respect to remuneration 
paid after Dec. 31, 1958, see section 401(d) of Pub. L. 85-840, set out 
as a note under section 1401 of this title.


                    Effective Date of 1956 Amendment

    Amendment by act Aug. 1, 1956, applicable with respect to 
remuneration paid after Dec. 31, 1956, see section 202(d) of such act 
Aug. 1, 1956, set out as a note under section 1401 of this title.


 Penalties and Interest Not Assessed for Failure To Make Timely Payment 
 During Period January 1, 1982, to June 30, 1982, of Taxes Attributable 
                     to Amendments by Pub. L. 97-123

    For provision that no penalties or interest shall be assessed on 
account of any failure to make timely payment of taxes imposed by this 
section with respect to payments made for the period Jan. 1, 1982, and 
ending June 30, 1982, to the extent that such taxes are attributable to 
section 3 of Pub. L. 97-123 or the amendments made by that section, see 
section 3(f) of Pub. L. 97-123, set out as a note under section 3101 of 
this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 45B, 401, 3112, 3121, 3122, 
3125, 3126, 3127, 3211, 3221, 3507, 6051, 6205, 6413, 6674, 6690 of this 
title; title 2 sections 162b, 658a, 1503; title 10 section 2467; title 
40 section 214d; title 42 sections 401, 401a, 418, 429, 910, 1395i, 
1395ww, 12594.
