U.S. Code > Title 26 Internal Revenue Code > Subtitle C—Employment Taxes (§§ 3101—3510) > CHAPTER 21—FEDERAL INSURANCE CONTRIBUTIONS ACT (§§ 3101—3128) > Subchapter B—Tax on Employers (§§ 3111—3113) > § 3111. Rate of tax

§ 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 exclusively to the laws applicable to the social security system of such foreign country.
(d) Special exemption for certain individuals hired in 2010
(1) In general
Subsection (a) shall not apply to wages paid by a qualified employer with respect to employment during the period beginning on the day after the date of the enactment of this subsection and ending on December 31, 2010, of any qualified individual for services performed—
(A) in a trade or business of such qualified employer, or
(B) in the case of a qualified employer exempt from tax under section 501 (a), in furtherance of the activities related to the purpose or function constituting the basis of the employer’s exemption under section 501.
(2) Qualified employer
For purposes of this subsection—
(A) In general
The term “qualified employer” means any employer other than the United States, any State, or any political subdivision thereof, or any instrumentality of the foregoing.
(B) Treatment of employees of post-secondary educational institutions
Notwithstanding subparagraph (A), the term “qualified employer” includes any employer which is a public institution of higher education (as defined in section 101(b) of the Higher Education Act of 1965).
(3) Qualified individual
For purposes of this subsection, the term “qualified individual” means any individual who—
(A) begins employment with a qualified employer after February 3, 2010, and before January 1, 2011,
(B) certifies by signed affidavit, under penalties of perjury, that such individual has not been employed for more than 40 hours during the 60-day period ending on the date such individual begins such employment,
(C) is not employed by the qualified employer to replace another employee of such employer unless such other employee separated from employment voluntarily or for cause, and
(D) is not an individual described in section 51 (i)(1) (applied by substituting “qualified employer” for “taxpayer” each place it appears).
(4) Election
A qualified employer may elect to have this subsection not apply. Such election shall be made in such manner as the Secretary may require.
(5) Special rule for first calendar quarter of 2010
(A) Nonapplication of exemption during first quarter
Paragraph (1) shall not apply with respect to wages paid during the first calendar quarter of 2010.
(B) Crediting of first quarter exemption during second quarter
The amount by which the tax imposed under subsection (a) would (but for subparagraph (A)) have been reduced with respect to wages paid by a qualified employer during the first calendar quarter of 2010 shall be treated as a payment against the tax imposed under subsection (a) with respect to the qualified employer for the second calendar quarter of 2010 which is made on the date that such tax is due.