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Social Security counts wages when earned, not paid, affecting benefits if pay crosses calendar years.

Market News
03 Sep 2026
247 Wallst
View Source
Neutral
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A construction worker who earned wages in December but received his paycheck in January may find those earnings counted against the previous year's Social Security earnings limit. Social Security counts wages based on when they are earned, not when they are paid, which can cause unexpected benefit reductions if the earnings exceed the annual limit. Self-employed contractors face the opposite rule, with income counted when received. Special payments like bonuses or severance may be treated differently if earned before retirement. It's important for retirees working before full retirement age to track the actual work dates on pay stubs to avoid surprises in Social Security benefit calculations.

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