FICA tax rates are fixed by law and split between you and your employer

FICA tax has two parts: Social Security and Medicare. You pay 6.2% of your wages to Social Security, up to a yearly earnings cap. You pay 1.45% of all your wages to Medicare with no cap. Your employer pays an equal amount for each. If you're self-employed, you pay both the employee and employer share, which comes to 15.3% total, though you can deduct half of it on your tax return.

These rates have been the same since 1990 for Social Security and since 1966 for Medicare. Congress would have to pass a new law to change them. The Social Security wage base — the maximum earnings subject to that tax — changes each year based on wage growth. For 2024, that cap is $168,600. Earnings above that amount are not subject to Social Security tax, but Medicare tax continues on every dollar you earn.

Your paycheck stub shows FICA as separate line items. The amount you see deducted is your employee share only. Your employer's share does not appear on your stub but is a real cost to them and a real benefit to you, since it counts toward your Social Security and Medicare records.

Key Takeaways

  • You pay 6.2% to Social Security on earnings up to $168,600 in 2024, and your employer pays the same amount.
  • You pay 1.45% to Medicare on all earnings with no upper limit, and your employer matches this amount.
  • If you are self-employed, you pay both the employee and employer portions, totaling 15.3%, though you can deduct half on your taxes.
  • The Social Security wage base increases each year; earnings above it are not taxed for Social Security but are still taxed for Medicare.

How the Social Security portion works

Social Security tax is 6.2% of your gross wages, taken from your paycheck before taxes. The 6.2% rate applies to every dollar you earn up to the annual wage base. In 2024, that base is $168,600. If you earn $200,000 in a year, you pay Social Security tax only on the first $168,600, not on the remaining $31,400.

Your employer also pays 6.2% on your behalf. This employer contribution is recorded in your Social Security account and counts toward your future benefits, even though you never see the money. When you retire, the Social Security Administration uses your earnings record — which includes both your contributions and your employer's — to calculate your benefit amount.

If you work for multiple employers in the same year, each one withholds 6.2% up to the wage base. This can mean you pay more than the standard amount if your combined earnings exceed the cap. For example, if you earn $100,000 at one job and $100,000 at another, you pay 6.2% on both, even though your total is $200,000. You can claim a credit for the overpayment when you file your tax return.

How the Medicare portion works

Medicare tax is 1.45% of your gross wages, with no earnings cap. You pay 1.45% on your first dollar and your last dollar, no matter how much you earn. Your employer also pays 1.45%. Unlike Social Security, there is no wage base limit — high earners pay the same rate as everyone else.

There is an additional Medicare tax of 0.9% that applies to high earners. This extra tax kicks in at $200,000 for single filers, $250,000 for married couples filing jointly, and $125,000 for married couples filing separately. Only the employee pays this additional tax; the employer does not. If you cross these thresholds, your employer withholds the extra 0.9% from your paycheck.

The combined Medicare rate for most workers is 1.45%. For high earners, it can be 2.35% (1.45% + 0.9%). Self-employed people pay both the employee and employer portions of the base 1.45%, totaling 2.9%, plus the additional 0.9% if their income exceeds the threshold.

What happens if you're self-employed

Self-employed workers pay both the employee and employer share of FICA, known as self-employment tax. This totals 15.3%: 12.4% for Social Security and 2.9% for Medicare. You calculate self-employment tax on your net earnings from self-employment, which is your business income minus business expenses.

The Social Security portion (12.4%) still applies only to earnings up to the annual wage base. In 2024, that is $168,600. The Medicare portion (2.9%) applies to all net self-employment earnings. If you earn $200,000 from self-employment, you pay 12.4% on $168,600 and 2.9% on the full $200,000.

You report self-employment tax on Schedule SE when you file your tax return. You can deduct half of your self-employment tax as an adjustment to income, which lowers your taxable income. This deduction roughly mirrors the fact that an employee's employer contribution is not counted as income to the employee.

FICA tax and your earnings record

Every dollar of FICA tax you pay — whether as an employee or self-employed — is recorded in your Social Security account under your name and Social Security number. The Social Security Administration tracks your earnings year by year. When you reach retirement age, they use your 35 highest-earning years to calculate your monthly benefit.

You can view your earnings record online through your Social Security account at ssa.gov. The record shows how much you earned each year and how much FICA tax was withheld. If you spot an error — such as earnings that were not credited to your account — you can report it to Social Security and request a correction.

FICA tax also counts toward your may be able to access for disability and survivor benefits. If you become disabled or die, your family may receive benefits based on your earnings record. The more you have paid into the system, the higher those benefits can be.

How FICA tax differs from income tax

FICA tax and federal income tax are separate. FICA is a fixed percentage with a wage cap (for Social Security); income tax is progressive, meaning the rate increases as you earn more. You pay both from the same paycheck, but they fund different programs and are calculated differently.

FICA tax goes to Social Security and Medicare. Income tax goes to the general Treasury and funds federal operations. Your employer withholds both, but they appear as separate line items on your pay stub. The amount withheld for income tax depends on your W-4 form and your filing status; the amount withheld for FICA is automatic and does not change based on your personal circumstances.

Self-employed people file Schedule SE to calculate self-employment tax and Schedule C to report business income and calculate income tax. The two are filed together but calculated separately on your tax return.

Frequently Asked Questions

What is the 2024 Social Security wage base?

The 2024 Social Security wage base is $168,600. You pay 6.2% Social Security tax on earnings up to this amount. Earnings above $168,600 are not subject to Social Security tax, though they are still subject to the 1.45% Medicare tax.

Do I pay FICA tax on tips?

Yes. Tips are considered wages and are subject to FICA tax. Your employer should withhold FICA tax on tips you report. If you receive cash tips that you do not report, you are still required to pay FICA tax on them when you file your tax return.

Can I avoid paying FICA tax?

No. FICA tax is mandatory for all employees and self-employed people. The only exception is certain religious groups that have received a waiver from the IRS, which is rare and requires specific conditions. For most workers, FICA tax is withheld automatically from every paycheck.

What if I overpaid Social Security tax?

If you worked for multiple employers and your combined earnings exceeded the wage base, you may have overpaid. You can claim a credit for the overpayment on your tax return. The IRS will refund the excess when you file.

Does FICA tax explore to all types of income?

FICA tax applies to wages and self-employment income. It does not explore to investment income, rental income, or other passive income. However, if you are self-employed, you pay self-employment tax on your net business income regardless of other income sources.