What Are the Different Types of Social Security Taxes?

Social security tax, also known as "social insurance tax", mainly refers to the payment of corporate salaries as the object of collection, which is paid by employees and employers separately. The tax is mainly used as a purpose tax for various social welfare expenses. In terms of tax rates, proportional tax rates are generally applied, with employers and employees each paying 50%. Employers and employees in different countries use different tax rates. Social security tax has become one of the main taxes in Western countries. Employers and employees who are employed in the taxing country, regardless of their nationality and place of residence, bear social security tax obligations in that country.

Social security tax

In 1889, the German Bismarck government initiated the social security tax, and then Britain in 1905, France in 1910,

Internationally, countries

The scope of social security tax is usually the wages, salaries and income from employers and employees who have participated in domestic social insurance and have an employment relationship in the country. The employer and employee's tax obligations are generally Based on domestic employment, employers and employees employed in the taxing country, regardless of their nationality and place of residence, must bear social insurance tax obligations in that country. Wages and salaries earned by domestic residents who are employed by their employers but work abroad are generally not included in the taxable range except for individual countries.

In line with the scope of the social security tax, the taxation objects are mainly the amount of wages and salaries paid by the employer, the amount of salary income obtained by the employee, and the net income from the business owner. In specific implementation, although the models of social security taxes in different countries are different, and the taxation targets are different, the basic content is the same. The first is that the taxation object does not include

Most developed countries

due to

Social security tax is a special form of income tax.

The U.S. is the world's earliest form of taxation

China's reference to "levy a social security tax" has appeared as early as 1996. In the "Ninth Five-Year Plan" of the national economic and social development of that year and the outline of the long-term goals for 2010, it was proposed that social security taxes should be gradually levied. Since then, relevant persons in charge of the financial department have stated on different occasions that they will study the introduction of social security taxes.

April 1, 2010, Minister of Finance of the People's Republic of China

At present (2010) China implements a "dual model" with Chinese characteristics that some provinces collect from local tax bureaus and some provinces collect labor and personnel. The provincial government has the power to decide on the establishment of collection management agencies. From the perspective of international developments, the reform of social security taxes and fees is not a simple tax or fee reform, but it is certain that the collection mechanism of social security taxes and fees should be integrated with general tax administration agencies.

There are two sources of social security funds for countries around the world: one is to collect special taxes and fees. Social insurance taxes and fees in countries around the world are called social security taxes and fees in most countries. They are generally levied on employers and employees and self-employed people. They are actually a type of tax. This name is used in the OECD (OECD) revenue statistics. Some countries explicitly name it taxation. The second is that most social welfare expenditures are mainly derived from general tax revenue. Social security funds in these countries generally have persistent deficits and need to be subsidized from general tax revenue. From the practice of each country, not all countries that have established social security systems have separately established relevant taxes and fees.

The OECD Center for Tax Policy and Tax Management released a report entitled "2008 OECD and Non-OECD Countries' Tax Management: Comparable Information Series" in January 2009. The report's survey involved 43 OECD member states and non-member states. In addition to the 30 member states, the other 13 countries are Argentina, Chile, China, South Africa, Bulgaria, Cyprus, Estonia, Latvia, Malta, Romania, Slovenia, Malaysia and Singapore.

In most of the countries surveyed by the OECD, most countries have social security taxes and fees, which are used as supplementary sources of government revenue for specialized government services, particularly medical care, unemployment benefits, and pension financing. At present (2010) the vast majority of these countries are still directly derived from the Bismarck model of the social security system, which is also the basis of the social security systems of most European Union countries. The Bismarck model treats social security provided by the government as a special form of insurance, and the benefits and taxes paid are linked to workers' salaries. Social security taxes and fees have become the largest source of government tax revenue for many OECD countries, especially those in European member states. Social security taxes and fees account for more than 10% of GDP in many countries, and the highest in France is 16.3%.