@trinag70
A person always pays Social Security and Medicare tax on income earned from working, no matter how old they are and no matter if they are also already collecting Social Security. (In some cases, paying additional Social Security tax into the system by working after retirement may increase a persons future benefits.)
Everything the employer pays as compensation for services performed is considered earned income, including cashing out your sick pay bank or severance pay. Even though contributions to qualified pre-tax retirement plans are not subject to income tax, they are still earned income and are subject to Social Security and Medicare tax. How much income tax is withheld is calculated with the usual withholding formula. How much income tax is owed at the end of the year depends on the person’s overall income and other tax situation’s. But the Social Security and Medicare tax always comes out first.
