Social Security recipients got good news earlier this week, as the Social Security Administration confirmed that the cost-of-living adjustment (COLA) that will show up in the benefit checks they receive in January 2023 will rise by the largest percentage since the early 1980s. Those who count on the program will appreciate the boost, given that they've had to pay the higher costs that inflation has caused throughout 2022.

The vast majority of the revenue that goes to pay Social Security  benefits comes from the payroll taxes that workers and self-employed individuals pay. Although the tax rate isn't changing in 2023, the amount of earnings on which that rate gets charged is going up -- and that will boost the amount that high-income earners pay to help cover the program's costs.

For most workers, any changes in the amount of Social Security payroll tax they pay come from incremental changes to their wages or salaries. Employees have 6.2% of their taxable pay withheld from their paychecks to go toward Social Security. Sometimes, that amount is combined with the similar 1.45% payroll tax that goes toward the Medicare program, referred to by some employers as FICA withholding.

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Source Fool.com