FICA taxes are 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.
Here is how the 15.3% breaks down: 12.4% goes to Social Security and 2.9% goes to Medicare. If you are self-employed, you pay both halves yourself, which means 15.3% of your net business income goes to FICA. If you work for an employer, you pay 7.65% and your employer pays 7.65%.
The amount you owe changes slightly each year because the Social Security portion has a wage cap — a maximum income level above which you stop paying Social Security tax. Medicare has no cap, so you pay 2.9% on all your wages no matter how much you earn. High earners also pay an additional 0.9% Medicare tax on income above certain thresholds.
Key Takeaways
- FICA taxes are 15.3% total: 12.4% for Social Security and 2.9% for Medicare, split evenly between you and your employer if you are a W-2 employee.
- You only pay Social Security tax (12.4%) on income up to an annual cap, which changes each year; Medicare tax has no income limit.
- Self-employed workers pay the full 15.3% themselves on net business income, though you can deduct half of it on your tax return.
- High earners pay an extra 0.9% Medicare tax on wages above $200,000 (single) or $250,000 (married filing jointly).
- FICA taxes appear as separate line items on your pay stub labeled as Social Security tax and Medicare tax.
How the Social Security portion works
The Social Security tax rate is 12.4%, but only on wages up to a certain limit. That limit is called the wage base, and it increases most years to keep pace with inflation. In 2024, the wage base was $168,600, meaning you paid Social Security tax on the first $168,600 you earned and nothing on income above that.
Once you hit the wage base for the year, your employer stops taking Social Security tax from your paycheck for the rest of that calendar year. If you worked for multiple employers in the same year, each one withholds Social Security tax independently up to the wage base, which can mean you overpay — but you get the overage back when you file your tax return.
The wage base changes annually. The Social Security Administration announces the new figure in October for the following year. If you earn close to or above the wage base, check the current year's limit so you know when your Social Security withholding will stop.
How the Medicare portion works
Medicare tax is 2.9%, and there is no wage cap — you pay it on every dollar you earn, no matter how much you make. This is different from Social Security, which stops once you hit the annual limit.
On top of the standard 2.9%, there is an additional Medicare tax of 0.9% that applies to high earners. You pay this extra tax if your wages exceed $200,000 in a year (if you are single), $250,000 (if you are married filing jointly), or $125,000 (if you are married filing separately). Your employer withholds this extra 0.9% automatically if your wages cross the threshold.
The additional 0.9% Medicare tax is not split between you and your employer the way the standard 2.9% is — you pay all of it yourself. Your employer does not contribute to this extra tax.
What self-employed workers pay
If you are self-employed, you pay both the employee and employer portions of FICA taxes, for a total of 15.3%. You calculate this on your net business income — the money left after you subtract business expenses.
The good news is that you can deduct half of your self-employment tax on your income tax return. This reduces your taxable income and lowers your overall tax bill. You calculate self-employment tax on Schedule SE (Form 1040), and the deduction appears on your Form 1040 itself.
Self-employed workers still have the Social Security wage base cap and the Medicare thresholds for the additional 0.9% tax. If your net business income exceeds the Social Security wage base, you stop paying the 12.4% Social Security portion on income above that limit, just as an employee would.
Where FICA taxes go
Social Security tax funds the Social Security program, which pays retirement benefits, disability benefits, and survivor benefits. Medicare tax funds the Medicare program, which provides health insurance for people age 65 and older and some younger people with disabilities or end-stage renal disease.
These are not savings accounts in your name. The taxes you pay today go directly to fund current beneficiaries. When you retire, your benefits come from taxes paid by workers at that time. This is why both programs are called pay-as-you-go systems.
Your FICA tax contributions are tracked under your Social Security number. The Social Security Administration keeps a record of your earnings history, which determines how much you receive in retirement benefits. You can view your earnings record and benefit estimate online through your personal account at ssa.gov.
How FICA taxes appear on your pay stub
Your pay stub shows FICA taxes as separate line items. You will see "Social Security Tax" or "OASDI" (Old-Age, Survivors, and Disability Insurance) and "Medicare Tax" or "Med Tax" listed individually. Each shows the amount withheld from that paycheck.
If you earn above the Social Security wage base, the Social Security line will show $0.00 for the rest of the year once you have paid the maximum. Medicare tax will continue on every paycheck. If you are a high earner, you may also see a line for "Additional Medicare Tax" or "Medicare Surtax" once your year-to-date wages cross the threshold.
Your employer is required to match your FICA contributions, but that amount does not appear on your pay stub — it is a separate cost to the employer. You only see your half of the tax.
What happens if you overpay FICA taxes
Overpayment usually happens when you work for multiple employers in the same year. Each employer withholds Social Security tax up to the wage base independently, so if your combined income from all jobs exceeds the wage base, you may pay more than the annual maximum.
When you file your tax return, you report all your wages and FICA taxes paid. If you overpaid Social Security tax, the IRS calculates the refund and includes it with your overall tax refund. You cannot claim an overpayment of Medicare tax as a refund — you only get relief if you overpaid the additional 0.9% Medicare tax, which the IRS will refund if you did not owe it.
To avoid confusion, keep all your pay stubs from every job you held during the year. They show exactly how much FICA tax each employer withheld, and you will need that information when you file.
Frequently Asked Questions
Can I opt out of paying FICA taxes?
No. FICA taxes are mandatory for all employees and self-employed workers. Some religious groups have limited exemptions from self-employment tax, but these are rare and require IRS approval. If you work as a W-2 employee, you cannot avoid FICA withholding.
Do FICA taxes count toward my income tax?
No. FICA taxes and income tax are separate. FICA funds Social Security and Medicare. Income tax funds general government operations. Both are withheld from your paycheck, but they go to different places and are calculated differently.
What if I did not work the whole year?
You only pay FICA taxes on the income you actually earned. If you earned $50,000 in a year, you pay FICA on $50,000, not on the full wage base. The wage base cap only matters if you earn that much or more.
Do I pay FICA taxes on tips?
Yes. Tips are considered wages for FICA purposes. You and your employer both pay FICA taxes on tips you report. If you do not report tips to your employer, you still owe FICA tax on them when you file your tax return.
How do I know how much FICA tax I have paid so far this year?
Your pay stub shows FICA withheld for that paycheck. Add up all the FICA lines from every pay stub you have received so far in the year to get your year-to-date total. You can also log into your employer's payroll system if they offer one online.