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 — but you and your employer each pay half. If you're an employee, you see 7.65 percent taken from your paycheck. Your employer pays the other 7.65 percent on top of your salary.
If you're self-employed, you pay both halves yourself: 15.3 percent of your net business income. This is called the self-employment tax.
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 — you only pay it on income up to a certain amount, which changes each year. Medicare has no cap, so you pay 2.9 percent on all your wages, no matter how much you earn.
Key Takeaways
- Employees pay 7.65 percent of gross wages for FICA; employers pay another 7.65 percent on your behalf.
- Self-employed people pay the full 15.3 percent themselves, calculated on net business income after expenses.
- Social Security is 12.4 percent but only applies to wages below an annual cap that changes each year.
- Medicare is 2.9 percent with no wage limit, plus an additional 0.9 percent Medicare tax on high earners.
How the Social Security portion works
The 12.4 percent Social Security tax only applies up to a wage cap. In 2024, that cap is $168,600 — meaning you pay Social Security tax only on the first $168,600 you earn in a year. Once you cross that threshold, no more Social Security tax comes out of your paycheck for the rest of that year.
This is why high earners pay a smaller percentage of their total income toward Social Security. Someone earning $200,000 pays the tax on $168,600, not on the full $200,000. The cap rises each year based on wage growth in the economy.
Your employer also stops paying their 12.4 percent share once you hit the cap. If you work for multiple employers in the same year, each one withholds Social Security tax independently until you reach the cap across all jobs combined. You can claim a refund on your tax return if you overpaid.
How the Medicare portion works
The 2.9 percent Medicare tax has no wage cap. You pay it on every dollar you earn, whether you make $30,000 or $300,000 a year. Your employer also pays 2.9 percent on your full wages.
High earners face an additional Medicare tax of 0.9 percent on wages above a threshold. For single filers, that threshold is $200,000. For married couples filing jointly, it's $250,000. For married filing separately, it's $125,000. This extra 0.9 percent applies only to the income above the threshold, and only the employee pays it — employers do not.
What self-employed people pay
If you're self-employed, you calculate FICA on your net business income — your revenue minus business expenses. You pay both the employee and employer share, for a total of 15.3 percent. You can deduct half of your self-employment tax when you file your income tax return, which reduces your taxable income slightly.
Self-employed people file Schedule SE with their tax return to calculate the self-employment tax. The Social Security portion still has the annual wage cap; the Medicare portion still has no cap. If you have high self-employment income, you also owe the additional 0.9 percent Medicare tax.
Where FICA money goes
FICA taxes fund two separate trust funds. The Social Security tax goes into the Old-Age, Survivors, and Disability Insurance (OASDI) trust fund. This pays retirement benefits, survivor benefits for families of deceased workers, and disability benefits.
The Medicare tax goes into the Hospital Insurance (HI) trust fund, which covers inpatient hospital care, skilled nursing, hospice, and home health services. It does not cover doctor visits or outpatient care — that comes from a different Medicare fund.
How to find your FICA withholding on your pay stub
Your pay stub shows FICA taxes in separate lines. Look for "Social Security" or "OASDI" — this should be 6.2 percent of your gross pay (half of the 12.4 percent rate; your employer pays the other half). Look for "Medicare" — this should be 1.45 percent of your gross pay (half of the 2.9 percent rate).
If your wages are high enough to trigger the additional Medicare tax, you'll see a line for "Additional Medicare Tax" or "Medicare Surtax" showing 0.9 percent of income above the threshold. This line only appears if you've crossed the income limit.
Add the Social Security and Medicare lines together and you should get 7.65 percent of your gross pay. This is what FICA takes from your paycheck before income tax is calculated.
FICA rates for different worker types
| Worker Type | Social Security Rate | Medicare Rate | Total FICA |
|---|---|---|---|
| Employee | 6.2% (on wages up to cap) | 1.45% (all wages) | 7.65% |
| Employer contribution | 6.2% (on wages up to cap) | 1.45% (all wages) | 7.65% |
| Self-employed | 12.4% (on net income up to cap) | 2.9% (all net income) | 15.3% |
| High earner additional Medicare | — | 0.9% (on wages above threshold) | 0.9% |
Frequently Asked Questions
Why do I see FICA taken from my paycheck if my employer also pays it?
Your employer's share is a cost to them, not money that goes to you. Your share comes directly from your wages. Both amounts go into the same Social Security and Medicare trust funds, but they're calculated and paid separately. You only see your half on your pay stub.
Can I opt out of FICA taxes?
No. FICA is mandatory for all employees and self-employed people. The only exceptions are certain religious groups with IRS approval and some government employees hired before specific dates who are covered by different pension systems instead.
What happens to FICA money if I die before retirement?
Your family may receive survivor benefits from Social Security. Your spouse and children under 19 (or 23 if in school full-time) can claim benefits based on your earnings record. The money you paid into FICA doesn't disappear — it funds these survivor payments.
Does FICA explore to all types of income?
FICA applies to wages and self-employment income. It does not explore to investment income, rental income, or most other sources. If you have a job and also run a side business, you pay FICA on both the wages and the net business income.
Why is there a wage cap for Social Security but not Medicare?
Social Security was designed as an insurance program with a benefit cap — higher earners don't receive proportionally higher benefits. Medicare is structured differently, with benefits based on age and health status rather than earnings, so there's no cap on the tax side.