For most American workers, FICA is the tax they never chose but can't escape. Before federal income tax, before state tax, before that 401(k) contribution, FICA takes its cut: 7.65% of every paycheck, on the nose. Your employer pays another 7.65% that you never see. Combined, $15.30 of every $100 you earn goes to fund Social Security and Medicare. [1]
That makes FICA the largest tax most middle-income workers pay.
If you earn $60,000, your annual FICA bill is $4,590. Your federal income tax bill, after deductions, might only be $4,200 or so. FICA is bigger, and most people barely notice it.
30-Second Summary: FICA taxes fund Social Security (6.2% on wages up to $184,500 in 2026) and Medicare (1.45% on all wages, plus an extra 0.9% for high earners). Employees split the bill with employers. Self-employed workers pay both halves (15.3%) but deduct half on their tax return. FICA is separate from federal income tax.
What FICA Stands For (and Funds)
FICA is the Federal Insurance Contributions Act. It authorized two payroll taxes:
- Social Security (OASDI): Funds retirement, disability, and survivor benefits. Rate: 6.2% employee, 6.2% employer.
- Medicare (HI): Funds hospital insurance for people 65 and older. Rate: 1.45% employee, 1.45% employer.
Together: 7.65% from your paycheck, 7.65% from your employer, 15.3% total.
These are flat-rate taxes on wages. Unlike federal income tax, which uses progressive brackets and taxes higher income at higher rates, FICA charges the same percentage on your first dollar and your hundred-thousandth dollar. (With one major exception we'll get to.)
For a deeper dive into the Social Security component specifically, see our article on OASDI tax.
2026 FICA Rates and Limits
| Component | Employee | Employer | Self-Employed |
|---|
| Social Security (OASDI) | 6.2% | 6.2% | 12.4% |
| Medicare (HI) | 1.45% | 1.45% | 2.9% |
| Total | 7.65% | 7.65% | 15.3% |
Social Security wage base (2026): $184,500. [2] Earnings above this amount are not subject to the 6.2% Social Security tax. The cap was $176,100 in 2025.
Medicare wage cap: None. Every dollar of wages is subject to the 1.45% Medicare tax. No ceiling.
Additional Medicare Tax: An extra 0.9% on wages above $200,000 (single), $250,000 (married filing jointly), or $125,000 (married filing separately). [3] Your employer does not match this surtax.
Worked Example: Lucia, Age 28, $60,000 Salary
Lucia earns $60,000 at her marketing job and gets paid biweekly (26 paychecks).
Annual FICA:
- Social Security: $60,000 × 6.2% = $3,720
- Medicare: $60,000 × 1.45% = $870
- Total employee FICA: $4,590
Per paycheck:
- Gross pay: $2,307.69
- Social Security: $143.08
- Medicare: $33.46
- FICA per paycheck: $176.54
Her employer sends another $4,590 on her behalf. The government collects $9,180 total from her $60k salary.
That $176.54 per paycheck doesn't appear as one line on most pay stubs. You'll typically see "Social Security" (or "OASDI") and "Medicare" as separate deductions. Combined, they're your FICA contribution.
Worked Example: James, Age 42, $225,000 Salary, Single
James earns well above the Social Security wage base.
Social Security (capped): $184,500 × 6.2% = $11,439
No Social Security tax on the $40,500 above the cap.
Medicare (base): $225,000 × 1.45% = $3,262.50
Additional Medicare Tax: ($225,000 – $200,000) × 0.9% = $225
Only applies to the $25,000 above the $200k threshold.
Total employee FICA: $14,926.50
James stops paying Social Security tax partway through the year. Once his year-to-date wages hit $184,500 (roughly late September, if evenly distributed), his Social Security withholding drops to zero for the remaining paychecks. His take-home bumps up temporarily. Some people call this the "Social Security holiday," though that's just informal shorthand. Medicare continues on every paycheck all year.
Self-Employment: Paying Both Halves
If you're a freelancer, contractor, or business owner, you pay self-employment tax, the self-employed version of FICA. The rate is 15.3% (12.4% Social Security + 2.9% Medicare). [4]
The sting: you're both the employee and the employer. No one matches you.
The relief: you can deduct the employer half (7.65%) when calculating your adjusted gross income. That deduction reduces your income tax, though it doesn't reduce the self-employment tax itself.
Example: $60,000 net self-employment income (2026)
- Social Security: $60,000 × 12.4% = $7,440
- Medicare: $60,000 × 2.9% = $1,740
- Total SE tax: $9,180
- Half-SE deduction (for income tax): $4,590
Lucia the employee pays $4,590 in FICA. A self-employed person earning the same $60,000 pays $9,180 in SE tax but deducts $4,590 from taxable income, partially offsetting the extra cost.
Technically, self-employment tax is calculated on 92.35% of net earnings, not 100%. That small adjustment reflects the fact that employees don't pay FICA on the employer's share. But for a quick estimate, multiplying net earnings by 15.3% gets you close enough.
Who Is Exempt From FICA?
Nearly everyone pays. But narrow exceptions exist:
- Students employed by the school they attend may be exempt from FICA on those wages.
- Some religious groups (like the Old Order Amish) who waive the right to Social Security benefits can file Form 4029 for exemption.
- Certain nonresident aliens on specific visas (F-1, J-1, M-1, Q-1) in their first few years.
- State/local government employees covered by qualifying pension plans that predate 1984 may be exempt from Social Security (but not Medicare).
If you work two jobs and your combined wages exceed the Social Security wage base, both employers still withhold independently. You may overpay Social Security tax. Claim the excess as a credit when you file your 1040. [1]
How FICA Differs From Income Tax
People lump "taxes" together, but FICA and federal income tax are fundamentally different animals. For a detailed comparison, see payroll tax vs. income tax.
| Feature | FICA | Federal Income Tax |
|---|
| Rate structure | Flat (same % for everyone) | Progressive (brackets) |
| What it funds | Social Security + Medicare | General government operations |
| Wage cap | Yes (Social Security only) | No cap |
| Can you reduce it? | Generally no | Yes (deductions, credits) |
| W-4 adjustable? | No | Yes |
You can't adjust FICA withholding on your W-4. It comes out automatically at 7.65% of wages. Federal income tax withholding, on the other hand, depends on your W-4 choices and can be fine-tuned. For details, see how withholding works.
Your Next Move
- Check your next pay stub. Find the Social Security and Medicare lines. Add them up. That's your FICA contribution per paycheck.
- If you're self-employed, set aside at least 15.3% of net income for self-employment tax on top of your income tax estimate. Quarterly estimated payments at IRS.gov prevent penalties.
- If you work multiple jobs, track combined wages. If they exceed $184,500 in 2026, you may overpay Social Security tax and should claim the credit on your return.
- Use our tax bracket calculator to estimate your full tax picture, including FICA.
- Understand your full tax load. FICA is just one piece. Add federal income tax, state income tax, and any local taxes to see your true effective rate.
References
- IRS. (n.d.). Topic No. 751, Social Security and Medicare Withholding Rates. https://www.irs.gov/taxtopics/tc751
- Social Security Administration. (n.d.). Contribution and Benefit Base. https://www.ssa.gov/oact/cola/cbb.html
- IRS. (n.d.). Questions and Answers for the Additional Medicare Tax. https://www.irs.gov/businesses/small-businesses-self-employed/questions-and-answers-for-the-additional-medicare-tax
- IRS. (n.d.). Self-Employment Tax. https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes
