FICA taxes take 15.3% of your wages combined, split between you and your employer
FICA stands for Federal Insurance Contributions Act. It funds Social Security and Medicare. You pay half the tax (7.65%) directly from your paycheck, and your employer pays the other half (7.65%) on your behalf. Together, that 15.3% comes out of the money your employer spends on you.
The 7.65% you see on your pay stub breaks into two parts: 6.2% for Social Security and 1.45% for Medicare. These are not optional—they come out of every paycheck if you are a W-2 employee or self-employed.
If you are self-employed, you pay both halves yourself: 12.4% for Social Security and 2.9% for Medicare, totaling 15.3%. You can deduct half of this on your tax return, but you still write the check for the full amount.
Key Takeaways
- Employees pay 7.65% of gross wages to FICA; employers pay another 7.65% on top of your salary.
- Social Security tax is 6.2% on wages up to a yearly cap (the cap changes each year), while Medicare tax is 1.45% with no cap.
- Self-employed workers pay the full 15.3% themselves but can deduct half on their tax return.
- High earners pay an additional 0.9% Medicare tax on income above $200,000 (single) or $250,000 (married filing jointly).
Social Security tax has a wage cap; Medicare tax does not
The Social Security portion (6.2%) only applies to the first portion of your income each year. In 2024, that cap is $168,600. Once you earn that much in a calendar year, no more Social Security tax comes out of your paycheck for the rest of that year. The cap changes annually based on wage growth.
Medicare tax (1.45%) has no cap. You pay it on every dollar you earn, no matter how much you make. This is why high earners pay a smaller percentage of total income to FICA than middle-income workers—the Social Security portion stops, but Medicare keeps going.
If you change jobs mid-year, each employer withholds Social Security tax separately. You may overpay if your combined income from both jobs exceeds the cap. When you file your tax return, you get a refund for the overpayment.
Additional Medicare tax applies to higher earners
If your income exceeds certain thresholds, you pay an extra 0.9% Medicare tax. For single filers, the threshold is $200,000. For married couples filing jointly, it is $250,000. For married filing separately, it is $125,000.
This additional tax applies to wages, self-employment income, and certain investment income. Your employer withholds it automatically if your wages cross the threshold. If you are self-employed or have multiple income sources, you may need to pay it when you file your return.
How FICA appears on your pay stub
Your pay stub shows FICA taxes in two lines: one for Social Security and one for Medicare. You will see them labeled as "FICA—Social Security" and "FICA—Medicare" or sometimes as "OASDI" (Old Age, Survivors, and Disability Insurance) for Social Security.
The amount withheld is calculated on your gross pay—the full amount before any other deductions. If you earn $1,000 in a pay period, FICA is calculated on the full $1,000, even though you also have federal income tax, state tax, and possibly health insurance premiums deducted.
Your employer also reports their half of FICA on your W-2 form, but you do not see it deducted from your check. It is part of your total compensation cost to the employer.
Self-employed workers and FICA taxes
If you are self-employed, you pay FICA as self-employment tax. The rate is 15.3%—both the employee and employer portions combined. You calculate it on your net profit (income minus business expenses) using Schedule SE when you file your tax return.
Self-employment tax is due when you file your return or through quarterly estimated tax payments if you expect to owe $1,000 or more. You can deduct half of your self-employment tax on your return, which reduces your taxable income.
If you have both W-2 income and self-employment income, the Social Security wage cap applies to your combined earnings. This can get complicated if you are close to the cap—a tax professional can help you calculate it correctly.
FICA taxes fund Social Security and Medicare benefits
The 6.2% Social Security tax you pay goes into a fund that pays retirement, disability, and survivor benefits. The amount you receive in retirement depends on how much you earned and how long you paid into the system. You become may be able to access for full retirement benefits at an age that depends on your birth year (currently between 66 and 67 for people born in the 1950s and 1960s).
The 1.45% Medicare tax funds health insurance for people 65 and older and some younger people with disabilities. It covers hospital insurance (Part A). You pay additional premiums for doctor visits (Part B) and prescription drugs (Part D) when you enroll.
Both programs have trust funds that are managed separately. If you want to see your estimated Social Security benefit, you can create an account at ssa.gov and view your earnings record and projected benefits.
Frequently Asked Questions
Can I opt out of paying FICA taxes?
No. FICA taxes are mandatory for all W-2 employees and self-employed workers. The only exceptions are certain religious groups that have received a formal exemption from the IRS, and some government employees hired before specific dates who are covered by different pension systems instead.
What happens if I work for two employers in the same year?
Each employer withholds Social Security tax separately. If your combined income exceeds the yearly cap, you will overpay Social Security tax. When you file your return, you get a refund for the overpayment. Medicare tax has no cap, so you straightforward pay 1.45% to each employer.
Do FICA taxes count toward my income tax?
No. FICA taxes and federal income tax are separate. FICA funds Social Security and Medicare. Federal income tax funds general government operations. Both are withheld from your paycheck, but they go to different places and are calculated differently.
Why do I pay FICA if I might not collect Social Security?
You pay FICA because it is required by law, not because you are may provide to collect. However, most workers do receive benefits—either retirement benefits, disability benefits, or survivor benefits for their family. Even if you do not collect, your payments help fund benefits for current retirees and disabled workers.
How do I know if I am paying the right amount?
Check your pay stub against the rates listed here: 6.2% for Social Security (up to the yearly cap), 1.45% for Medicare, and an additional 0.9% Medicare if you earn above the income thresholds. If the amounts do not match, contact your payroll department. If you are self-employed, a tax professional can review your calculation.