Earnings Test
Understanding How the Social Security Earnings Test Works
Verified against SSA POMS as of August 20, 2026
The short answer
The Social Security Earnings Test reduces benefits based on excess earnings, applicable to beneficiaries under full retirement age (FRA) and those reaching FRA during the year. For those under FRA, $1 is deducted for every $2 earned over the exempt amount. In the year of attaining FRA, $1 is deducted for every $3 earned over the exempt amount before the FRA month. The test ceases after reaching FRA. Disabled beneficiaries and certain other exceptions are not subject to this test.
Introduction to the Earnings Test
The Earnings Test (ET) is used to measure the degree of a beneficiary's retirement and determine deductions from monthly benefits. It affects those receiving Social Security benefits who have work earnings, primarily impacting individuals under full retirement age (FRA) as described in RS 02501.021.
RS 02501.021 View source ›Application of the Earnings Test
Beneficiaries under or in the year of FRA may have their monthly benefits reduced if they exceed certain earnings thresholds. The ET takes into account wages and self-employment income. Beneficiaries who do not exceed these earnings are not subject to the deductions unless non-service months apply during a grace year. Detailed information can be found in RS 02501.021B.
RS 02501.021 View source ›Annual Exempt Amount and Deductions
For those who have not reached their FRA, $1 is deducted from benefits for every $2 earned over the annual exempt amount. For those in the year of reaching FRA, only earnings before the FRA month are considered, with $1 deducted for every $3 over the exempt amount. Refer to RS 02501.021B4 for exemption rates.
RS 02501.021 View source ›Exceptions to the Earnings Test
Certain beneficiaries are exempt from the ET, including those at FRA, those receiving disability benefits, and certain divorced spouses and individuals who work outside the U.S. under specific conditions. For further details, refer to RS 02501.021B5.
RS 02501.021 View source ›End of Earnings Test Application
The ET ceases once a beneficiary attains FRA. Historically, the ET applied until age 75, which was lowered progressively to 70 before 2000. See RS 02501.021B6 for historical changes.
RS 02501.021 View source ›Frequently asked
How does the Social Security earnings test apply before full retirement age?
Before full retirement age, $1 is deducted for every $2 earned over the exempt amount. This applies to earnings from work.
What happens in the year I reach full retirement age with the earnings test?
In the year you reach FRA, the earnings test considers only pre-FRA month earnings. $1 is deducted for every $3 earned over the exempt amount until the month of FRA.
Is the earnings test applicable after reaching full retirement age?
No, the earnings test does not apply after you reach full retirement age. At that point, your benefits are no longer reduced based on your earnings.
Who is exempt from the Social Security earnings test?
Disabled beneficiaries, certain divorced spouses, and beneficiaries working outside the U.S. in non-covered work are exempt from the earnings test.
What are excess earnings as defined by Social Security?
Excess earnings are the amounts by which your earnings exceed the allowed exempt amounts, leading to deductions from your benefits.