FICA takes 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 percent of your gross wages — that is, your pay before deductions. Your employer withholds 7.65 percent from your paycheck, and your employer pays the other 7.65 percent on your behalf. If you are self-employed, you pay both halves yourself, which comes to 15.3 percent of your net business income.

The 15.3 percent breaks into two parts: 12.4 percent for Social Security and 2.9 percent for Medicare. Social Security has a wage cap — in 2024, you stop paying into it after you earn $168,600 in a year. Medicare has no cap, so you pay 2.9 percent on all wages, no matter how much you earn. High earners also pay an additional 0.9 percent Medicare tax on wages above $200,000 (single) or $250,000 (married filing jointly).

Key Takeaways

  • FICA is 15.3 percent total: 12.4 percent for Social Security and 2.9 percent for Medicare.
  • Your employer withholds 7.65 percent from your paycheck; your employer pays 7.65 percent separately.
  • Social Security tax stops once you earn $168,600 in a year, but Medicare tax continues on all income.
  • Self-employed workers pay the full 15.3 percent themselves, though they can deduct half of it on their tax return.
  • High earners pay an extra 0.9 percent Medicare tax on wages above $200,000 or $250,000, depending on filing status.

How the Social Security portion works

The Social Security part of FICA is 12.4 percent. Your employer withholds 6.2 percent from each paycheck. Once your wages hit $168,600 in a calendar year, no more Social Security tax comes out of your pay for the rest of that year. This wage cap changes each year — it was $160,200 in 2023 and $168,600 in 2024.

If you work for more than one employer in the same year, each one withholds 6.2 percent until you reach the cap. This can mean you overpay Social Security tax if your combined wages exceed the cap. You can claim the overpayment as a credit on your federal tax return, but you have to file to get it back — it does not happen automatically.

How the Medicare portion works

The Medicare part of FICA is 2.9 percent, and it has no wage cap. Your employer withholds 1.45 percent from every paycheck, no matter how much you earn. There is no limit to how much Medicare tax you pay in a year.

If your wages exceed $200,000 (or $250,000 if you are married filing jointly), you owe an additional 0.9 percent Medicare tax on the amount over that threshold. Your employer withholds this extra tax automatically once your wages cross the threshold. Unlike Social Security, this additional Medicare tax does not have a wage cap — it applies to all income above the threshold.

What self-employed workers pay

If you are self-employed, you pay both the employee and employer portions of FICA yourself. That means you pay 15.3 percent of your net self-employment income — the profit from your business after expenses. You calculate this on Schedule SE (Self-Employment Tax) when you file your federal tax return.

The good news is that you can deduct half of your self-employment tax on your tax return. This reduces your taxable income and lowers your overall tax bill. You also pay self-employment tax only on net income, not on gross revenue, so business expenses reduce the amount you owe.

Where FICA money goes

Social Security tax funds retirement, disability, and survivor benefits. When you turn 62 or older, you can begin drawing Social Security retirement benefits based on your earnings history. If you become disabled before retirement age, you may receive Social Security Disability Insurance (SSDI). If you die, your spouse and children may receive survivor benefits.

Medicare tax funds health insurance for people 65 and older, regardless of income. It also covers some younger people with disabilities and people with end-stage renal disease. Medicare has four parts — A (hospital), B (medical), D (prescription drugs), and C (Medicare Advantage) — and FICA funds parts A and B.

FICA on your pay stub

Your pay stub shows FICA withholding in two lines: one for Social Security (often labeled "OASDI" or "Social Security") and one for Medicare. The Social Security line shows 6.2 percent of your gross pay, up to the annual wage cap. The Medicare line shows 1.45 percent of your gross pay, with no cap. If you earn over the high-income threshold, you will see a third line for the additional 0.9 percent Medicare tax.

Your employer also pays FICA on your behalf, but this does not appear on your pay stub — it is a separate cost to the employer. You can see the employer portion on your W-2 form at the end of the year, in boxes 8 and 10.

How FICA differs from income tax

FICA and federal income tax are separate. FICA funds Social Security and Medicare specifically. Federal income tax goes to the general Treasury and funds all federal government operations. Your employer withholds both from your paycheck, but they are calculated differently and go to different places.

FICA has fixed rates: 12.4 percent for Social Security (with a wage cap) and 2.9 percent for Medicare (no cap). Federal income tax withholding depends on your W-4 form, your income level, and your filing status. You can adjust your federal withholding by changing your W-4, but you cannot change your FICA withholding — the rates are set by law.

Frequently Asked Questions

Why do I pay FICA if I might not collect Social Security?

FICA funds current retirees and disabled workers, not just your own future benefits. Even if you never collect, your payments support the system. You also build a record of earnings that may matter if you become disabled or if your family needs survivor benefits after your death.

Can I opt out of FICA?

No. FICA withholding is 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. Regular employees cannot opt out.

What happens if I work part-time or have irregular income?

FICA is withheld on every paycheck, regardless of how many hours you work or how often you are paid. If you are self-employed with irregular income, you still owe self-employment tax on your annual net profit, even if some months are slow.

Do I get FICA back if I overpay?

You can get back overpaid Social Security tax if you work for multiple employers and exceed the wage cap. File your federal tax return and claim the overpayment as a credit. Overpaid Medicare tax cannot be refunded — there is no cap on Medicare withholding.

Is FICA the same as payroll tax?

FICA is one type of payroll tax. Payroll tax is a broad term that includes FICA (Social Security and Medicare) plus federal income tax withholding, state income tax, and local taxes. Your employer withholds all of these from your paycheck.