The FICA percentage is the portion of your paycheck that goes to Social Security and Medicare

FICA stands for Federal Insurance Contributions Act. The percentage taken from your paycheck funds two programs: Social Security and Medicare. As of 2024, you pay 6.2% of your wages to Social Security and 1.45% to Medicare, for a total of 7.65%. Your employer matches these amounts, but the employer match does not come out of your paycheck — it is a separate cost to them.

The percentage is the same whether you earn $30,000 or $300,000 per year, with one exception: Social Security tax stops once you hit the wage base limit. In 2024, that limit is $168,600, meaning once you earn that much in a calendar year, no more Social Security tax is taken. Medicare tax, however, continues on all wages with no upper limit. High earners also pay an additional 0.9% Medicare tax on wages above $200,000 (single filers) or $250,000 (married filing jointly).

Key Takeaways

  • You pay 6.2% to Social Security and 1.45% to Medicare, totaling 7.65% of your gross wages.
  • Social Security tax stops once you reach the annual wage base limit, but Medicare tax continues on all earnings.
  • Your employer pays an equal 7.65% on your behalf, though this does not reduce your paycheck.
  • Self-employed workers pay both the employee and employer portions, totaling 15.3%, though they can deduct half on their tax return.
  • The percentages are set by federal law and do not change based on your income level or filing status.

Why the percentage is the same for everyone

FICA is a flat-rate tax, not a progressive one like income tax. This means the 7.65% rate applies to your first dollar of wages and your last dollar, regardless of how much you earn. A person making $25,000 per year pays the same percentage as someone making $250,000 per year.

The only variation comes from the wage base limit on Social Security. Once you cross that threshold in a given year, your Social Security tax rate effectively drops to zero for the remainder of that year, even though your Medicare tax continues. This creates a situation where a high earner's overall FICA percentage is slightly lower than a lower earner's, but the rate itself — 6.2% and 1.45% — never changes.

How FICA appears on your pay stub

Your pay stub shows FICA deductions in separate line items. You will see "Social Security Tax" or "OASDI" (Old Age, Survivors, and Disability Insurance) listed at 6.2%, and "Medicare Tax" listed at 1.45%. Some pay stubs also show "Medicare Additional Tax" if you are a high earner subject to the extra 0.9%.

These amounts are subtracted from your gross pay before you receive your paycheck. Your employer withholds them and sends them to the IRS on your behalf. You do not have to do anything to pay FICA — it happens automatically through payroll withholding. The only time you interact with FICA directly is if you are self-employed, in which case you calculate and pay it yourself when you file your tax return.

Self-employed workers and the FICA percentage

If you are self-employed, you pay both the employee and employer portions of FICA, totaling 15.3%. This is called Self-Employment Tax and is calculated on your net business income (your revenue minus business expenses). You pay this tax when you file your annual tax return, usually by making quarterly estimated tax payments throughout the year.

The IRS allows self-employed workers to deduct half of their self-employment tax on their tax return, which reduces the effective cost slightly. For example, if you owe $3,000 in self-employment tax, you can deduct $1,500 from your income before calculating your income tax. This deduction does not reduce the self-employment tax itself — only your taxable income for income tax purposes.

The wage base limit and how it affects your percentage

The Social Security wage base limit changes each year based on wage growth in the economy. In 2024, the limit is $168,600. This means if you earn $168,600 or more in wages during the year, you stop paying the 6.2% Social Security tax once you reach that amount.

If you change jobs mid-year, each employer withholds Social Security tax independently until you hit the limit. This can result in overpayment if your combined wages from multiple employers exceed the limit. When you file your tax return, you can claim a refund for the excess Social Security tax paid. Medicare tax has no wage base limit, so you continue paying 1.45% on all wages no matter how much you earn.

Additional Medicare tax for high earners

Employees who earn above certain thresholds pay an extra 0.9% Medicare tax on top of the standard 1.45%. The thresholds are $200,000 for single filers, $250,000 for married couples filing jointly, and $125,000 for married couples filing separately. This additional tax is withheld by your employer if your wages exceed the threshold.

Unlike the Social Security wage base limit, the additional Medicare tax is based on your filing status and total income for the year, not just wages from a single employer. If you are unsure whether you will owe this tax, you can adjust your W-4 form to have extra Medicare tax withheld from your paycheck throughout the year.

Frequently Asked Questions

Does FICA come out before or after income tax?

FICA comes out of your gross pay at the same time as income tax withholding. Both are deducted before you receive your paycheck. FICA is separate from income tax — they fund different programs and are calculated differently.

Can I opt out of paying FICA?

No. FICA is mandatory for all employees and self-employed workers. Certain religious groups may request an exemption, but this is rare and requires IRS approval. Most workers have no option to avoid FICA withholding.

What happens to the FICA money I pay?

Social Security tax funds retirement, disability, and survivor benefits. Medicare tax funds hospital insurance and medical coverage for people 65 and older. The money is not held in a personal account — it goes into a general fund that pays current beneficiaries.

If I work two jobs, do I pay FICA on both?

Yes, you pay FICA on wages from both jobs. However, if your combined earnings exceed the Social Security wage base limit, you may overpay Social Security tax. You can claim a refund of the overpayment when you file your tax return.

Does the FICA percentage ever change?

The percentages are set by federal law and have remained at 6.2% for Social Security and 1.45% for Medicare since 1990. Congress would need to pass new legislation to change these rates. The wage base limit does change annually based on wage growth.