Social security systems worldwide operate under a shared objective: to provide financial protection for retirees, the disabled, unemployed and survivors. While the underlying philosophies are similar, the way governments collect and manage contributions can differ significantly—especially when it comes to income caps, where only a portion of earnings is subject to social security taxes. This blog explores how major countries implement these caps, what the pros and cons of such a policy are, and how modern software solutions like Interact SSAS can seamlessly handle changes to contribution caps. Understanding Income Caps on Social Security An income cap sets a ceiling on the portion of earnings subject to social security taxes or contributions. If a country caps annual earnings at a certain figure (for example, $50,000), wages above that threshold are not taxed for social security. This mechanism is often justified as a way to limit the tax burden on high...