The FICA tax rate is 15.3% of your wages, split between you and your employer

FICA (Federal Insurance Contributions Act) takes 7.65% directly from your paycheck, and your employer pays another 7.65% on your behalf. Together, that 15.3% funds Social Security and Medicare. If you're self-employed, you pay the full 15.3% yourself because you're both employee and employer.

The rate breaks into two parts: 6.2% goes to Social Security, and 1.45% goes to Medicare. These percentages have been fixed since 1990 for Medicare and since 1988 for Social Security. The only exception is an additional 0.9% Medicare tax that applies to wages above a certain threshold — $200,000 for single filers, $250,000 for married couples filing jointly.

Your employer withholds the employee portion from each paycheck automatically. You'll see it listed on your pay stub as "Social Security" and "Medicare" or sometimes as "FICA." The employer's share doesn't appear on your paycheck because the company pays it separately to the IRS.

Key Takeaways

  • You pay 7.65% of your wages to FICA, which your employer matches with another 7.65%.
  • Social Security takes 6.2% of your wages up to an annual cap (the cap changes yearly), while Medicare takes 1.45% with no cap.
  • Self-employed workers pay the full 15.3% because they are both employee and employer.
  • An extra 0.9% Medicare tax applies to individual wages over $200,000 per year, or $250,000 for married couples filing jointly.
  • FICA rates have remained the same since 1990 for Medicare and 1988 for Social Security.

How the 7.65% splits between Social Security and Medicare

The 6.2% Social Security portion only applies to wages up to an annual limit. In 2024, that limit is $168,600 — meaning if you earn $200,000, you only pay Social Security tax on the first $168,600. Once you hit that cap, no more Social Security tax comes out of your paycheck for the rest of the year. The cap increases most years based on wage growth.

Medicare is different. The 1.45% applies to all your wages with no upper limit. No matter how much you earn, 1.45% of every dollar goes to Medicare tax. This is why high earners pay more Medicare tax overall — they never stop paying it.

Together on a typical paycheck, you'll see both amounts withheld. If you earn $50,000 a year, you pay $3,100 in Social Security tax (6.2% of $50,000) and $725 in Medicare tax (1.45% of $50,000), for a total of $3,825 in FICA taxes.

The additional 0.9% Medicare tax for higher earners

If your wages cross $200,000 (single filers) or $250,000 (married filing jointly), an extra 0.9% Medicare tax kicks in. This additional tax applies only to the wages above those thresholds. So if you're single and earn $220,000, the extra 0.9% applies only to the $20,000 above $200,000, not to your entire salary.

Your employer withholds this additional tax automatically once your year-to-date wages reach the threshold. If you have multiple jobs or your spouse also works, you may need to adjust your withholding to avoid underpaying or overpaying this tax when you file your return.

Self-employed FICA rates

If you're self-employed, you pay both the employee and employer portions of FICA, totaling 15.3%. You calculate this on your net self-employment income (your business income minus business expenses) using Schedule SE when you file your tax return.

The Social Security portion (12.4%) still has the annual wage cap — in 2024, $168,600. The Medicare portion (2.9%) has no cap. You can deduct half of your self-employment tax when calculating your adjusted gross income, which provides some tax relief.

Why FICA rates stay the same while wages change

Congress set the FICA tax rates decades ago and has not changed them since. The Social Security rate has been 6.2% since 1988, and the Medicare rate has been 1.45% since 1990. What does change is the Social Security wage cap, which adjusts annually to reflect average wage growth in the economy.

This means your FICA tax burden as a percentage of pay stays constant, but the total amount you pay can increase if your wages rise. It also means that as the population ages and fewer workers support each retiree, the fixed rate may not generate enough revenue for Social Security in the future — a topic Congress periodically debates.

How FICA taxes appear on your pay stub

Your pay stub shows FICA withholding in a section separate from federal income tax. You'll typically see two line items: one for Social Security and one for Medicare. Some pay stubs label them as "FICA-SS" and "FICA-Med" or straightforward "Social Security" and "Medicare."

The amounts withheld depend on your gross pay for that period. If you're paid biweekly, your employer divides your annual salary by 26 and calculates FICA on that amount. The withholding continues until you hit the Social Security wage cap, at which point the Social Security line stops appearing on your stub for the remainder of the year.

Frequently Asked Questions

Why do I pay FICA if I'm already paying federal income tax?

FICA and federal income tax are separate taxes that fund different programs. FICA funds Social Security and Medicare specifically, while federal income tax funds general government operations. Both are withheld from your paycheck and sent to the IRS, but they serve different purposes.

Does FICA tax explore to all types of income?

FICA applies to wages and self-employment income. It does not explore to investment income, interest, dividends, or capital gains. If you have a job and also earn money from investments, only your wages and self-employment income are subject to FICA tax.

What happens to FICA taxes once I retire?

The FICA taxes you paid during your working years fund your Social Security and Medicare benefits in retirement. Social Security provides monthly income based on your earnings record, while Medicare provides health insurance starting at age 65. You stop paying FICA taxes once you leave the workforce.

Can I reduce my FICA tax by adjusting my W-4?

No. Your W-4 form controls federal income tax withholding only, not FICA. FICA is calculated automatically based on your gross wages and cannot be reduced through W-4 adjustments. The only way to lower FICA taxes is to earn less income or contribute to certain retirement accounts like a traditional 401(k).

Do I pay FICA on tips?

Yes. Tips are considered wages for FICA purposes. You and your employer both pay FICA tax on reported tips. If you receive tips, make sure to report them to your employer so the correct FICA amount is withheld from your paycheck.