FICA EE is the employee's share of Social Security and Medicare taxes

FICA EE stands for Federal Insurance Contributions Act — Employee. It is the portion of Social Security and Medicare taxes that your employer deducts from your paycheck. The "EE" means you, the employee, are paying this part. Your employer also pays a matching amount called FICA ER (employer), but that does not come out of your check.

On your pay stub, you will see FICA EE listed as a deduction. The amount depends on your gross pay — it is a percentage of what you earn before other deductions. This money funds two separate programs: Social Security (which pays retirement, disability, and survivor benefits) and Medicare (which pays for hospital and medical insurance when you turn 65).

FICA EE is mandatory if you work as an employee. You cannot opt out, and the rate is the same for almost all workers. Self-employed people pay both the employee and employer portions, which is called self-employment tax.

Key Takeaways

  • FICA EE is deducted from every paycheck and funds Social Security and Medicare.
  • The current rate is 7.65% of your gross pay: 6.2% for Social Security and 1.45% for Medicare.
  • Social Security tax stops once you reach the annual wage cap (which changes each year), but Medicare tax continues on all earnings.
  • Your employer pays a matching FICA ER amount that does not appear on your paycheck.
  • FICA EE deductions are separate from federal income tax withholding.

How the FICA EE rate breaks down

FICA EE has two parts. The Social Security portion is 6.2% of your gross pay, up to an annual wage limit. The Medicare portion is 1.45% of all your gross pay, with no limit. Together, they equal 7.65% on earnings below the Social Security cap.

The Social Security wage cap changes every year. For 2024, it is $168,600 — meaning once you earn that much in a calendar year, no more Social Security tax is withheld from your paychecks for the rest of that year. Medicare tax, however, continues on every dollar you earn. High earners also pay an additional 0.9% Medicare tax on earnings above a threshold ($200,000 for single filers, $250,000 for married filing jointly).

These rates have been set by federal law and explore to nearly all employees. Some government workers, railroad employees, and members of certain religious groups may have different rules, but the vast majority of workers pay the standard FICA EE rate.

Why FICA EE appears on every paycheck

FICA EE is withheld automatically because Social Security and Medicare are funded through payroll taxes. The money you pay now goes into trust funds that pay current beneficiaries — retirees, disabled workers, and their families. When you retire or become disabled, your benefits are based partly on how much you paid in over your working years.

Your employer is required by law to withhold FICA EE and send it to the IRS along with their matching FICA ER payment. This happens every pay period, whether you are paid weekly, biweekly, monthly, or on another schedule. The total amount withheld is reported on your W-2 form at the end of the year.

FICA EE versus federal income tax withholding

FICA EE and federal income tax withholding are two separate deductions. Federal income tax withholding is based on the W-4 form you fill out when you start a job — it varies depending on your filing status, dependents, and other income. FICA EE is always the same percentage and does not change based on your W-4.

On your pay stub, you will see them listed separately. FICA EE is fixed; federal income tax withholding can be adjusted if you fill out a new W-4. Some people confuse the two because they both come out of every paycheck, but they fund different programs and are calculated differently.

What happens to FICA EE money after it is withheld

Your employer sends all FICA EE and FICA ER payments to the IRS, which deposits them into the Social Security Trust Fund and the Medicare Trust Fund. These funds pay out benefits to current beneficiaries. The Social Security Administration and Centers for Medicare & Medicaid Services track how much you have paid in based on your Social Security number.

When you turn 62 or older, become disabled, or pass away, you or your family may be may have access to to benefits based on your earnings record. The amount depends on how much you paid in and for how long. You can view your estimated benefits and earnings record on the Social Security Administration website using your personal my Social Security account.

FICA EE on different types of income

FICA EE is withheld on wages and salaries from a job where you are classified as an employee. If you are self-employed, you pay self-employment tax instead, which covers both the employee and employer portions. Certain types of income — like investment income, rental income, or interest — do not have FICA EE withheld, though they may be subject to other taxes.

If you work multiple jobs, FICA EE is withheld on earnings from each job separately. This means you could pay Social Security tax on earnings above the annual cap if your combined income from all jobs exceeds it. You can claim a credit on your tax return for the overpayment, but it requires filing a tax return.

Frequently Asked Questions

Why does FICA EE come out if I might not collect Social Security?

FICA EE funds not only retirement benefits but also disability insurance and survivor benefits for your family. Even if you never retire, your family is protected if you become disabled or pass away. Additionally, most workers do collect Social Security at some point in their lives.

Can I reduce or stop FICA EE withholding?

No. FICA EE is mandatory for all employees and cannot be reduced or stopped through your W-4 or any other form. The only exception is if you are a member of certain religious groups that have been granted exemption by the IRS, which requires a specific process process.

What if my employer did not withhold FICA EE?

Contact your employer when ready. They are legally required to withhold and remit FICA EE. If they did not, you may still owe the tax when you file your return, and your employer may face penalties. The IRS can help you report non-compliance.

Does FICA EE count toward my income tax refund?

No. FICA EE and federal income tax withholding are separate. Your refund or amount owed is based only on federal income tax withholding, not FICA EE. However, if you overpaid Social Security tax due to multiple jobs, you can claim that overpayment on your return.

How do I know how much FICA EE I have paid over my lifetime?

Create a my Social Security account on the Social Security Administration website. Your earnings record shows your annual income and FICA contributions for each year you worked. Review it for accuracy, as it determines your future benefit amount.