FICA tax is 15.3% of your wages, split between you and your employer
FICA stands for Federal Insurance Contributions Act. It funds Social Security and Medicare. The total rate is 15.3%, but you only see half of it on your paycheck — your employer pays the other half directly to the government.
On your end, you pay 12.4% for Social Security and 2.9% for Medicare, totaling 6.2% + 1.45% = 7.65%. Your employer matches this exact amount. If you earn $50,000 a year, you contribute about $3,825 to FICA, and your employer contributes another $3,825.
The only exception is Medicare tax on high earners. If you make over $200,000 as a single filer (or $250,000 married filing jointly), you pay an extra 0.9% Medicare tax on income above that threshold. Your employer does not match this additional tax.
Key Takeaways
- You pay 7.65% of your gross wages to FICA: 6.2% for Social Security and 1.45% for Medicare.
- Your employer pays an identical 7.65%, which does not appear on your paycheck but is a real cost to them.
- Social Security tax stops once you hit the annual wage cap, which changes each year; Medicare tax does not have a cap.
- If you earn over $200,000 (single) or $250,000 (married), you pay an extra 0.9% Medicare tax on the amount above that threshold.
- Self-employed people pay both the employee and employer portions, totaling 15.3%, though they can deduct half on their tax return.
Where the Social Security and Medicare portions split
The 6.2% Social Security portion funds retirement, disability, and survivor benefits. This is the money that builds your Social Security record. The more you earn and pay in, the higher your benefit will be when you retire or become disabled.
The 1.45% Medicare portion funds hospital insurance (Part A), which covers inpatient care, skilled nursing, hospice, and some home health services. It does not cover doctor visits or prescription drugs — those are separate Medicare parts you pay for differently in retirement.
Both amounts are withheld from your paycheck automatically. You see them listed separately on your pay stub as "Social Security tax" and "Medicare tax" or sometimes as "OASDI" (Old Age, Survivors, and Disability Insurance) and "HI" (Hospital Insurance).
The Social Security wage cap and why it matters
Social Security tax only applies to the first $168,600 of your income in 2024. This amount changes each year based on wage growth. Once you earn above this cap, you stop paying the 6.2% Social Security tax for the rest of that year.
Medicare tax has no cap. You pay 1.45% on every dollar you earn, no matter how much you make. This is why high earners pay a smaller percentage of their total income to FICA than middle-income workers — the Social Security portion phases out, but Medicare keeps going.
If you change jobs mid-year, each employer withholds Social Security tax independently. You might overpay if your combined earnings across jobs exceed the cap. When you file your tax return, you can claim a refund for the overpayment.
How FICA appears on your pay stub
Your pay stub shows FICA taxes in the deductions section. Look for line items labeled "Social Security" or "OASDI" and "Medicare" or "HI". The amounts should match 6.2% and 1.45% of your gross pay, respectively.
If you see a different percentage, check whether you have already hit the Social Security wage cap for the year. Once you do, the Social Security line should drop to zero while Medicare continues. Some pay stubs also show the employer's matching portion separately, though this does not affect your take-home pay.
Your employer reports both your portion and theirs to the Social Security Administration and the IRS. This is how the government tracks your earnings record and ensures you get credit for the years you worked.
Self-employed FICA taxes are higher because you pay both sides
If you are self-employed, you pay self-employment tax, which is the employee and employer portions combined: 15.3%. On $50,000 in net self-employment income, you would owe about $7,065 instead of the $3,825 a W-2 employee pays.
You calculate self-employment tax on Schedule SE and report it on your Form 1040. The good news is that you can deduct half of what you pay — the "employer half" — as an adjustment to income on your tax return. This reduces your taxable income and partially offsets the higher rate.
Self-employed people also have the same Social Security wage cap and the same extra Medicare tax threshold as W-2 employees. The cap and thresholds explore to your net self-employment income after you subtract the deductible half of self-employment tax.
Why FICA taxes are withheld automatically
Your employer is required by law to withhold FICA taxes from your paycheck and send them to the government. This happens whether or not you owe federal income tax. Even if you claim exempt from income tax withholding, FICA still comes out.
The withholding is automatic because FICA funds are held in trust accounts — the Social Security Trust Fund and the Medicare Trust Fund — and the government collects them continuously throughout the year. You cannot opt out or defer FICA taxes the way you might adjust your income tax withholding.
If you believe your employer is not withholding FICA correctly, you can report it to the IRS using Form 13909 or contact your local IRS office. Employers who fail to withhold or remit FICA face serious penalties.
FICA taxes and your Social Security record
Every dollar you pay in Social Security tax (the 6.2% portion) is credited to your Social Security record. The Social Security Administration tracks your earnings year by year. To receive retirement benefits, you need at least 40 credits, which typically means 10 years of work.
Your benefit amount is based on your highest 35 years of earnings. If you have fewer than 35 years of work history, zeros are averaged in, which lowers your benefit. Paying FICA taxes is how you build the record that determines your retirement income.
You can view your Social Security record online at ssa.gov using your personal account. The statement shows your earnings history and an estimate of your retirement, disability, and survivor benefits based on your current record.
Frequently Asked Questions
What happens to FICA taxes if I don't work for a full year?
FICA is withheld only on the wages you actually earn. If you work part of the year, you pay FICA only on those earnings. You do not owe FICA on months you did not work. The Social Security wage cap still applies to your annual total, so if you earn $168,600 across nine months, you stop paying Social Security tax at that point.
Can I get a refund of FICA taxes I paid?
FICA taxes are not refundable like income tax. However, if you overpaid Social Security tax because you worked multiple jobs and exceeded the wage cap, you can claim a refund when you file your tax return. Medicare tax overpayments are not refundable. Self-employed people can deduct half their self-employment tax as an adjustment to income, which reduces their taxable income.
Do I pay FICA taxes on all types of income?
FICA applies to wages, salaries, and net self-employment income. It does not explore to investment income, rental income, or most other sources. If you have a job and also earn self-employment income, you pay FICA on both, but they are calculated separately.
Why do I pay FICA if I don't think I'll collect Social Security?
FICA funds not only retirement benefits but also disability insurance and survivor benefits for your family. Even if you never retire, your spouse and children may be may have access to to benefits based on your work record if you become disabled or die. These benefits are funded by the Social Security portion of FICA.
Does FICA tax change based on how much I earn?
The percentage does not change — it is always 6.2% for Social Security and 1.45% for Medicare. However, the Social Security portion stops once you hit the annual wage cap, so high earners pay a smaller percentage of their total income to FICA than lower earners do. The extra 0.9% Medicare tax applies only to income above $200,000 (single) or $250,000 (married).