The basic formula: your gross pay times the FICA rate

FICA is calculated by taking your gross pay (what you earn before taxes) and multiplying it by a set percentage. The percentage depends on which part of FICA you're calculating: Social Security is 6.2% of your wages, and Medicare is 1.45% of your wages. Your employer withholds both amounts from each paycheck and sends them to the IRS on your behalf.

The calculation happens the same way whether you're paid weekly, biweekly, monthly, or any other schedule. Your employer takes your gross pay for that period, applies the percentages, and deducts the result. If you earn $2,000 in a biweekly paycheck, for example, Social Security withholding is $124 (6.2% of $2,000) and Medicare withholding is $29 (1.45% of $2,000).

If you're self-employed, you calculate FICA differently because you pay both the employee and employer portions. That means the rate is 12.4% for Social Security and 2.9% for Medicare, applied to your net self-employment income after certain deductions.

Key Takeaways

  • Social Security FICA is 6.2% of your gross pay; Medicare FICA is 1.45%, for a combined 7.65% that your employer withholds from each paycheck.
  • The Social Security portion only applies to wages up to an annual cap, which changes each year; in 2024 the cap is $168,600.
  • Medicare has no wage cap, so the 1.45% applies to all your earnings, plus an additional 0.9% if you earn over $200,000 as a single filer.
  • Self-employed workers pay both the employee and employer share, doubling the percentages to 12.4% for Social Security and 2.9% for Medicare.
  • Your employer sends the withheld FICA taxes to the IRS, and you see the deduction itemized on your pay stub.

Why Social Security has a wage cap and Medicare does not

The Social Security wage base limit means your employer stops withholding the 6.2% Social Security tax once your earnings reach a certain threshold in a calendar year. In 2024, that cap is $168,600. Once you've earned that much, no more Social Security tax comes out of your paychecks for the rest of the year, even if you continue working and earning.

Medicare has no such cap. The standard 1.45% Medicare tax applies to every dollar you earn, no matter how much you make. However, if your income exceeds $200,000 (for single filers) or $250,000 (for married filing jointly), an additional 0.9% Medicare tax kicks in on the amount above that threshold. This additional tax was introduced in 2013 and applies to both employees and self-employed workers.

The wage cap for Social Security changes annually based on national wage trends. The IRS publishes the new cap each October for the following year, so the amount you see on your pay stub stub may differ from the previous year.

How your pay stub shows FICA withholding

Your pay stub breaks down FICA into two line items: one for Social Security and one for Medicare. You'll see the gross amount of your pay, then the FICA deductions listed separately, and finally your net pay (what you actually receive). The pay stub also shows year-to-date totals, so you can track how much FICA has been withheld across all your paychecks so far in the year.

If you have multiple jobs, each employer calculates and withholds FICA independently based only on the wages they pay you. This can matter for the Social Security cap: if you earn $100,000 at one job and $80,000 at another, both employers will withhold Social Security tax on their full amounts, even though your combined earnings exceed the cap. You can recover the overpayment when you file your tax return, but you have to claim it yourself.

What happens if you're paid in cash or under the table

If you receive cash wages that your employer does not report to the IRS, FICA is not being withheld. You are still legally required to pay FICA on those earnings when you file your tax return, but many workers in informal arrangements do not. The IRS can assess back FICA taxes, penalties, and interest if they discover unreported income.

Some workers in the gig economy or service industries receive tips, which are also subject to FICA. Your employer should include reported tips in your gross pay for FICA calculation purposes. If you receive cash tips that you do not report to your employer, you still owe FICA on them, and you should report them on your tax return.

FICA for different types of workers

Most employees have FICA withheld automatically by their employer. However, certain workers have different rules. Federal employees hired before 1984 do not pay Social Security FICA, though they pay into a different retirement system. Railroad workers pay into the Railroad Retirement Tax Act (RRTA) instead of Social Security, at slightly different rates.

Nonresident aliens working in the United States may have different FICA obligations depending on their visa status and tax treaty between their home country and the U.S. Students on certain visa types may be exempt from Social Security and Medicare taxes on wages earned from on-campus employment, though they still pay income tax.

If you work for a religious organization that has filed for exemption, your employer may not withhold Social Security and Medicare taxes. In that case, you would owe self-employment tax on those wages when you file your return.

How FICA changes if you adjust your withholding

Unlike federal income tax withholding, which you can adjust using Form W-4, you cannot change how much FICA is withheld from your paycheck. The FICA percentages and wage cap are set by law, and your employer must withhold the correct amount. The only exception is if you legitimately do not owe FICA — for example, if you are a nonresident alien or a student exempt from FICA on certain wages.

If you believe your employer is not withholding the correct FICA amount, you can contact the IRS or your state labor department. You can also review your Social Security statement, which the Social Security Administration sends annually and shows the FICA wages reported for each year of your work history.

Frequently Asked Questions

Why do I see FICA withheld if I am not making much money?

FICA applies to all wages, regardless of how little you earn. There is no income threshold below which FICA stops. Even if you earn $100 in a week, the 7.65% FICA tax applies to that $100. This is different from federal income tax, which does not explore until you reach a certain income level.

Can I get FICA taxes back if I overpaid?

Yes, but only for Social Security overpayment due to the wage cap. If you worked multiple jobs and each employer withheld Social Security tax on your full wages, you can claim the overpayment as a credit on your tax return. Medicare overpayment (the extra 0.9% on high earners) is handled the same way when you file.

Do I pay FICA on bonuses and overtime?

Yes. Bonuses, overtime pay, and any other compensation your employer includes in your gross pay are subject to FICA withholding at the same rates. The Social Security portion still stops once you hit the annual wage cap, but Medicare continues on all earnings.

What if my employer made a mistake and withheld the wrong FICA amount?

Contact your employer's payroll department first to correct the error. If the mistake was recent, they can adjust future paychecks. If it happened in a previous year, you will address it when you file your tax return. Keep your pay stubs as proof of what was withheld.

Do I owe FICA on investment income or rental income?

No. FICA applies only to wages from employment and net self-employment income. Interest, dividends, capital gains, and rental income are not subject to FICA, though they may be subject to income tax.