How much of your earnings are subject to Social Security tax in 2027?

With Social Security announcing its annual cost-of-living adjustment for 2027 this week, the program also released new income thresholds subject to payroll taxes next year.

Social Security benefits are funded through payroll taxes, which are then invested in trust funds and paid out in monthly checks to millions of retirees and Americans with disabilities.

The tax only applies to earnings up to a yearly cap. Next year, the maximum amount of earnings subject to the Social Security tax in 2027 will jump to $192,300, up from $184,500 this year.

Here's how the math breaks down: Workers and their employers each pay 6.2% on wages up to that amount. If you're self-employed, you pay the entire amount — 12.4%.

That means the maximum Social Security withholding for a worker next year will be $23,842, or 12.4% of $192,300. Any income above that amount is not subject to the Social Security tax.

The backdrop: Social Security's reserves could run out at the end of 2032. At that point, if no adjustments are made, the entitlement program's Old-Age and Survivors Insurance (OASI) Trust Fund will be able to pay out only about 80% of benefits to seniors, according to the 2026 Social Security and Medicare Trustees' annual report.

Raising that earnings tax cap, or eliminating it, has been a contentious debate in Washington in the quest to address the future of Social Security.

Lawmakers have floated a range of fixes, from raising payroll taxes to increasing the retirement age for younger workers to lifting the cap on earnings subject to Social Security taxes.

"Congress has only two options to address the projected shortfall," Nancy Altman, president of Social Security Works, a nonprofit advocacy organization, told Yahoo Finance. "Bring more money into Social Security, or cut benefits."

One proposal that has attracted some bipartisan attention: Democratic Sen. Elizabeth Warren of Massachusetts and Republican Sen. Bernie Moreno of Ohio have introduced legislation to eliminate the income cap on contributions to Social Security.

As they wrote in their New York Times op-ed in July: "This is a no-brainer: The wealthiest Americans, who have benefited the most from America's opportunities, should contribute the same percentage of their income as a factory worker in Chillicothe, Ohio, or a teacher in Worcester, Mass."