How much do payroll taxes from unauthorized workers contribute to Social Security and Medicare revenues annually?
Executive summary
Estimates in recent reporting put unauthorized (undocumented) workers’ total tax contributions at about $96.7–$97 billion in 2022, and the Institute on Taxation and Economic Policy (ITEP) calculates that roughly one‑third of that — about $25.7 billion — was paid in Social Security (payroll) taxes in 2022, which also supports Medicare and unemployment trust funds indirectly [1]. Think tanks and academic writers note that unauthorized workers generally cannot collect Social Security retirement or Medicare benefits unless they later obtain lawful status, so much of those payroll receipts act as a net contribution to program finances [1] [2].
1. What the headline numbers say — billions in payroll taxes
Reporting based on ITEP’s analysis states unauthorized workers paid roughly $96.7–$97 billion in federal, state and local taxes in 2022, and ITEP estimates about one‑third of that total went to payroll taxes dedicated to social‑insurance programs; the New York Times cites an ITEP figure of $25.7 billion going to Social Security taxes in 2022 [1]. USA Today likewise emphasizes that unauthorized workers pay substantial federal payroll taxes that help fund Social Security and Medicare even though many do not qualify for those benefits [3].
2. How that money reaches Social Security and Medicare — payroll withholding rules
Social Security and Medicare payroll taxes are mechanically collected through employer withholding (FICA) at statutory rates: Social Security 12.4% total (6.2% employee + 6.2% employer) up to the annual wage base, and Medicare 2.9% total (1.45% + 1.45%) with no earnings cap [4]. Unauthorized workers who are paid through payroll (including those using ITINs or unauthorized SSNs in practice) therefore contribute via the same withholding system that applies to other wage earners [1] [4].
3. Why these contributions matter to program finances
Analysts and research centers note this revenue is effectively a net gain for trust funds because many unauthorized workers are ineligible to receive Social Security retirement or Medicare benefits unless their immigration status changes; therefore a portion of payroll taxes they pay represents a subsidy to beneficiaries who can claim benefits [1] [2]. The Center for Retirement Research stresses that unauthorized immigrants are not eligible for Medicare or Social Security retirement benefits and that their participation is, to the extent it exists, on the revenue side [2].
4. Limits and complications in the estimates
Available sources rely on modeling and tax‑data analysis rather than a direct line‑item in agency accounts. The ITEP estimate (cited in the New York Times and USA Today) aggregates federal, state and local tax contributions and apportions a share to payroll taxes; it is not a Social Security Administration ledger entry [1] [3]. The precise annual amount flowing into the Social Security and Medicare trust funds from unauthorized workers is not published as a separate official figure in the materials provided here — ITEP’s estimate is the primary quantified source in these search results [1] [3].
5. Competing viewpoints and institutional perspectives
The New York Times summarizes ITEP’s view that undocumented workers’ payroll tax payments “help finance Social Security benefits,” framing these payments as contributing significantly to program solvency [1]. The Center for Retirement Research emphasizes the near‑universal ineligibility of unauthorized immigrants for these benefits and frames their role as revenue contributors rather than beneficiaries [2]. Neither source argues that unauthorized workers undermine program finances; both agree they add revenue, but they emphasize different implications — one frames it as a subsidy to beneficiaries, the other as evidence that immigrants do not burden these systems via benefit claims [1] [2].
6. What the official tax mechanics show about scale and future context
IRS and SSA policy define the payroll tax rates and the Social Security taxable maximum, which determine how much revenue can be collected per worker; Social Security wages are capped (the “wage base” — $176,100 for 2025) while Medicare has no cap [4] [5]. As wage bases and overall employment of unauthorized workers change, the dollar contribution will move with total earnings and changes in the taxable maximum [4] [5].
7. Bottom line for policy discussions
If you quote a rounded annual figure based on currently available reporting, cite the ITEP‑based $25.7 billion going to Social Security taxes in 2022 and the roughly $96.7–$97 billion in total taxes paid by unauthorized workers that year [1] [3]. Note the limitation: these are estimates from a tax‑policy research group reported in major outlets, not discrete line items published by SSA or CMS; official agencies do not present a separate annual subtotal labeled “payroll taxes from unauthorized workers” in the materials provided here [1] [3] [2].
Limitations: available sources do not publish an SSA/CMS official breakdown isolating payroll tax receipts from unauthorized workers; the ITEP figure is the primary quantified estimate in the reporting you provided [1] [3].