The FICA tax rate is split between Social Security and Medicare

FICA combines two separate payroll taxes, each with its own rate. Social Security takes 6.2% of your wages, and Medicare takes 1.45%. If you're self-employed, you pay both the employee and employer portions, which doubles the rate to 15.3% total. Your employer pays the other half if you work for someone else — you see only your half on your pay stub.

These rates have been the same since 1990 for Social Security and since 1966 for Medicare, though Congress can change them. The rates explore to wages up to a certain limit each year for Social Security, but Medicare has no wage cap.

Key Takeaways

  • Social Security FICA is 6.2% of wages for employees, with a wage cap that changes yearly; your employer pays another 6.2%.
  • Medicare FICA is 1.45% of all wages with no upper limit, split equally between you and your employer.
  • Self-employed workers pay the full 15.3% (both employee and employer shares) on net business income.
  • An additional 0.9% Medicare tax applies to high earners, with thresholds that depend on your filing status.

How the Social Security wage cap works

Social Security tax only applies to earnings up to a certain amount each year. In 2024, that cap is $168,600 — meaning you pay 6.2% on the first $168,600 you earn, then nothing on income above that. The cap changes yearly based on national wage growth, so it will be different in 2025.

This is why high earners pay a smaller percentage of their total income in Social Security tax than middle-income workers do. Once you hit the cap, your paychecks stop showing Social Security withholding for the rest of that year. If you work for multiple employers, each one withholds up to the cap independently, which can mean you overpay — but you get the overage back when you file your tax return.

Medicare tax has no wage limit

Unlike Social Security, Medicare tax applies to every dollar you earn, no matter how much. There is no cap. This means a person earning $500,000 pays 1.45% on all $500,000, while someone earning $50,000 pays 1.45% on all $50,000.

However, there is an additional Medicare tax of 0.9% that kicks in at higher income levels. This extra tax applies to wages over $200,000 if you're single, over $250,000 if you're married filing jointly, or over $125,000 if you're married filing separately. Your employer withholds this extra 0.9% if your wages cross the threshold, though the exact calculation can be complex if you have multiple jobs or a spouse who also works.

What self-employed workers pay

If you're self-employed, you pay both the employee and employer share of FICA on your net business income. That's 12.4% for Social Security (up to the yearly wage cap) and 2.9% for Medicare, totaling 15.3% before any additional Medicare tax. You calculate this on Schedule SE when you file your tax return.

Self-employed workers can deduct half of their FICA tax as a business expense, which reduces taxable income. This deduction does not reduce the amount you owe — it just lowers the income that gets taxed at your regular income tax rate. The additional 0.9% Medicare tax also applies to self-employed income over the same thresholds as for employees.

How FICA rates compare to income tax withholding

FICA and income tax withholding are separate. Your pay stub shows them as different line items. FICA is a fixed percentage that does not change based on how many dependents you claim or your filing status — it is always 6.2% for Social Security and 1.45% for Medicare (plus 0.9% if applicable). Income tax withholding, by contrast, depends on the W-4 form you fill out and can vary widely from person to person.

Together, FICA and income tax withholding make up most of what comes out of your paycheck. A typical employee might see 7.65% in FICA (6.2% + 1.45%) plus somewhere between 10% and 25% in federal income tax, depending on their income and W-4 choices.

Why FICA rates matter for your take-home pay

Understanding FICA rates helps you predict what you'll actually receive in each paycheck. If you earn $3,000 in a pay period and have not hit the Social Security cap for the year, you'll see $186 withheld for Social Security (6.2% of $3,000) and $43.50 for Medicare (1.45% of $3,000), totaling $229.50 in FICA before income tax withholding.

For self-employed people, knowing the rates matters when setting aside money for taxes. Since you pay both halves, you need to set aside roughly 15.3% of net income for FICA alone, on top of income tax. Many self-employed workers make quarterly estimated tax payments that include FICA to avoid a large bill at tax time.

Frequently Asked Questions

Does FICA tax go toward my Social Security and Medicare benefits?

Yes. Social Security tax funds current retirees' benefits and your future benefit. Medicare tax funds the hospital insurance (Part A) that covers inpatient care. These are not savings accounts in your name — the money goes into trust funds that pay current beneficiaries, and your future benefits depend on those funds having enough money when you retire.

What happens if I work for two employers in the same year?

Each employer withholds Social Security tax up to the yearly cap independently. If your combined wages exceed the cap, you will overpay Social Security tax. You can claim the overage as a credit on your tax return when you file, and the IRS will refund it. Medicare tax has no cap, so there is no overpayment issue there.

Do FICA taxes 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. Some types of work, like certain religious workers or government employees in specific pension systems, may be exempt from FICA, but most jobs are covered.

Can FICA tax rates change?

Yes, Congress can change FICA rates, though it rarely does. The rates have been stable since 1990 for Social Security and 1966 for Medicare. The wage cap for Social Security changes yearly based on wage growth, but the percentage rate itself stays the same unless new legislation passes.

Is the additional 0.9% Medicare tax permanent?

The additional 0.9% Medicare tax was introduced in 2013 as part of the Affordable Care Act. It remains in effect unless Congress repeals it. It applies only to high earners and is separate from the standard 1.45% Medicare tax that everyone pays.