What FICA taxes are and why they come out of your pay
FICA taxes are Social Security and Medicare taxes that your employer withholds from each paycheck. The amount comes out automatically — you do not have to do anything to trigger it. The calculation is straightforward: it is a percentage of your gross pay (the amount before any deductions), applied up to an annual earnings cap for Social Security only.
Your employer matches what you pay, meaning they send in the same amount on your behalf. When you see FICA on your pay stub, you are looking at your half only. The employer's half does not appear on your stub but does get reported to the IRS.
The reason FICA comes out is federal law. Every person who works as an employee pays it, with very few exceptions. Self-employed people pay both halves themselves, which is called self-employment tax.
Key Takeaways
- Social Security tax is 6.2 percent of your gross pay, but only on earnings up to an annual cap that changes each year.
- Medicare tax is 1.45 percent of your gross pay with no earnings cap, plus an additional 0.9 percent on earnings above a threshold that depends on your filing status.
- To calculate your FICA, multiply your gross pay by the tax rate, then subtract any amount already withheld if you are calculating what remains for the year.
- Your pay stub shows the FICA withheld from that single paycheck, not your year-to-date total, so you may need to add multiple stubs to see your annual FICA.
- If you change jobs mid-year, you may overpay Social Security tax because each employer withholds based on their own records, not your total earnings across all jobs.
How to calculate Social Security tax on your paycheck
Social Security tax is 6.2 percent of your gross pay. To calculate it, take your gross pay for the pay period and multiply by 0.062. If you earn $1,500 in a pay period, your Social Security tax is $1,500 × 0.062 = $93.
The catch is the earnings cap. Each year, the Social Security Administration sets a maximum amount of earnings subject to the tax. Once you earn that amount in a calendar year, no more Social Security tax comes out of your paychecks for the rest of that year. The cap changes annually — it has been different every year for decades. You can find the current year's cap on the Social Security Administration website or on your employer's tax forms.
If you earn $168,600 in a year and the cap is $168,600, you pay Social Security tax on all $168,600. If you earn $180,000, you pay the tax only on the first $168,600, and the remaining $11,400 is not subject to Social Security tax. This is why high earners stop seeing Social Security tax withheld partway through the year.
How to calculate Medicare tax on your paycheck
Medicare tax has two parts. The first is 1.45 percent of your gross pay with no earnings cap — it applies to every dollar you earn. The second is an additional 0.9 percent on earnings above a threshold that depends on whether you file taxes as single, married filing jointly, or married filing separately.
For the base 1.45 percent: take your gross pay and multiply by 0.0145. If you earn $1,500, your base Medicare tax is $1,500 × 0.0145 = $21.75.
For the additional 0.9 percent: this applies only if your earnings for the year exceed the threshold. For single filers, the threshold is $200,000. For married filing jointly, it is $250,000. For married filing separately, it is $125,000. Once you cross that threshold, you pay an additional 0.9 percent on all earnings above it for the rest of the year. If you are single and earn $210,000, you pay the additional 0.9 percent on $10,000, which is $90.
Calculating your total FICA for a single paycheck
Add Social Security tax and Medicare tax together. Using the $1,500 example: Social Security is $93, base Medicare is $21.75, and if you have not crossed the additional Medicare threshold, your total FICA is $114.75.
Your pay stub will show this breakdown separately. Look for lines labeled "Social Security" or "OASDI" (Old-Age, Survivors, and Disability Insurance), "Medicare," and sometimes "Medicare Additional" or "Additional Medicare Tax" if you have crossed the threshold.
The amount on your stub is what came out of that paycheck only. If you want to know your year-to-date FICA, add up the FICA from every stub you have received so far in the year, or look for a year-to-date total on your most recent stub.
What to do if you overpaid Social Security tax
Overpayment happens most often when you work for two or more employers in the same year. Each employer withholds Social Security tax based on what they know about your earnings at their company only. If you earn $100,000 at Job A and $80,000 at Job B, each employer withholds Social Security tax on their full amount, even though your combined earnings exceed the cap.
You do not get a refund automatically. Instead, you claim the overpayment when you file your tax return. On your Form 1040, you report the overpaid Social Security tax, and the IRS refunds it to you or applies it to taxes you owe. Your employers will send you Forms W-2 showing what each withheld, so you can add them up and compare to the cap.
Medicare tax does not have an earnings cap, so overpayment there is rare. It can happen if you work multiple jobs and cross the additional Medicare threshold, but the rules for claiming it back are the same — you report it on your tax return.
Using your pay stub to verify the calculation
Your pay stub is the easiest place to check whether FICA was calculated correctly. Look for the line items labeled Social Security, Medicare, and any additional Medicare tax. Verify that the rate matches what you expect: 6.2 percent for Social Security (up to the cap), 1.45 percent for Medicare, and 0.9 percent additional Medicare if you have crossed the threshold.
Multiply your gross pay by each rate and compare it to what the stub shows. If the numbers do not match, check whether you have already hit the Social Security cap for the year — that is the most common reason for a difference. If the cap is not the issue, contact your payroll department to ask them to review the calculation.
Keep in mind that "gross pay" on your stub may not be your hourly rate times hours worked if you have other deductions like health insurance premiums or retirement contributions. Those come out before FICA is calculated on some plans and after on others, depending on whether they are pre-tax or post-tax. Your payroll department can clarify which applies to you.
Frequently Asked Questions
Does FICA tax come out before or after other deductions?
FICA is calculated on your gross pay, which is before most deductions. However, certain pre-tax deductions like traditional 401(k) contributions and health insurance premiums reduce your gross pay before FICA is calculated. Post-tax deductions like Roth contributions come out after FICA. Your pay stub will show the order.
What happens to FICA tax if I get a raise mid-year?
FICA is recalculated on each paycheck based on your current gross pay. If you get a raise, the new higher amount is subject to FICA at the same rates. For Social Security, once you hit the annual cap, no more tax comes out regardless of future raises.
Can I avoid paying FICA taxes?
No, with very few exceptions. Most employees must pay FICA. Some religious groups have exemptions, and certain government employees may not pay into Social Security, but these are rare. If you are an employee, FICA comes out of your pay.
Why is my FICA different on each paycheck?
If your pay varies — for example, if you work hourly and hours change — your gross pay changes, so FICA changes too. Also, once you hit the Social Security earnings cap, Social Security tax stops coming out, so your FICA will be lower in later paychecks. Bonuses and overtime also increase FICA on the paycheck they appear on.
Do I need to file taxes if FICA was withheld?
FICA and income tax withholding are separate. You may owe income tax even if FICA was withheld, or you may be owed a refund. Whether you must file depends on your income level and filing status, not on FICA alone. Check the IRS website or speak with a tax professional to determine whether you need to file.