What Is FICA? Social Security & Medicare Explained

FICA stands for the Federal Insurance Contributions Act — the federal payroll tax that funds Social Security and Medicare. It’s the line on your paycheck that combines two separate taxes: Social Security (6.2%) and Medicare (1.45%), totaling 7.65% of your wages. Your employer matches this with another 7.65%, so the total going to Social Security and Medicare is 15.3%.

If you’re self-employed, you pay BOTH halves yourself — the full 15.3% as “self-employment tax.”

2026 FICA breakdown

Employee rate: 6.2%
Wage base limit: $184,500 (2026) — income above this isn’t subject to Social Security tax
Employer rate: 6.2% (employer pays this on top of your wages)
Total: 12.4% (employee + employer)

Medicare tax

Employee rate: 1.45%
Wage base limit: NONE — applies to all wages
Employer rate: 1.45%
Total: 2.9%

Additional Medicare tax (high earners)

Employee rate: 0.9% on income above $200,000 single / $250,000 married
Employer rate: 0% (NOT matched — only employees pay this)
Wage base: Above the thresholds, no upper limit

Combined FICA on your paycheck

Standard worker: 7.65% (6.2% + 1.45%) of wages
High earner (over $200K): 8.55% (above the $200K threshold)
Beyond the SS wage base ($184,500): drops to 1.45% (only Medicare)

How FICA appears on your paycheck

Look for these line items on your pay stub:

Fed OASDI / EE or Social Security: 6.2% of gross wages
Fed MED / EE or Medicare: 1.45% of gross wages
Add’l Medicare: 0.9% (only if income over $200K)

Together they form your “FICA withholding.” Note this is in ADDITION to federal income tax, which is separately calculated based on your W-4 and income brackets.

How much FICA do I pay?

For typical earnings:

Annual gross	Monthly FICA	Annual FICA
$30,000	$191	$2,295
$50,000	$319	$3,825
$75,000	$478	$5,738
$100,000	$638	$7,650
$150,000	$956	$11,475
$200,000	$1,275	$15,300
$250,000	$1,540	$18,480 (cap on SS hits)

After Social Security wage base ($184,500), only Medicare (1.45% + 0.9% extra) continues.

Self-employment FICA (SE Tax)

Self-employed people pay the FULL FICA rate themselves:

Social Security: 12.4% on net SE income up to $184,500
Medicare: 2.9% on all net SE income
Additional Medicare: 0.9% above $200K/$250K
Total base rate: 15.3% on net earnings

This is called self-employment tax (Schedule SE).

Half deductible: You can deduct 50% of your self-employment tax as an above-the-line deduction (reduces AGI). This roughly equals what an employer would have paid, so the net economic effect is similar to W-2 workers.

What does FICA fund?

Retirement benefits (62+, full benefits 67+)
Disability benefits (SSDI for workers who can’t work)
Survivors benefits (paid to family of deceased workers)
Currently funds about $1.4 trillion/year in benefits

Medicare (1.45% / 2.9% total)

Part A (hospital insurance) — funded by Medicare tax
Part B (doctors), Part D (drugs) — partially funded by general revenue + premiums
Currently funds about $900 billion/year in benefits

The “trust funds” for both are projected to face shortfalls in the 2030s-2040s without changes to revenue or benefits.

Does FICA reduce my refund or tax bill?

No. FICA is a SEPARATE tax from federal income tax. Adjusting your W-4 changes income tax withholding — but FICA remains fixed at 7.65% of your wages.

FICA cannot be refunded (with rare exceptions for excess SS tax if you have multiple jobs and your combined SS withholding exceeds the maximum).

How to verify your FICA is correct

Check your pay stub: Social Security line should be 6.2% of gross wages. Medicare line should be 1.45%.
Check year-end W-2: Box 4 (Social Security tax) should be 6.2% of Box 3 (SS wages). Box 6 (Medicare tax) should be 1.45% of Box 5 (Medicare wages).
Year-end Social Security statement: Available at ssa.gov/myaccount — shows all earnings ever credited.

Errors are rare but happen — sometimes employers misclassify or use wrong rates. Worth verifying once a year.

FICA refund situations (rare)

You can get a refund of EXCESS Social Security tax if:

You had multiple jobs and combined SS withholding exceeded the annual maximum ($11,439 in 2026)
File Form 1040, Line 31 to claim the credit
Medicare has no refund situation (no cap)

Can I opt out of FICA?

Generally NO. Some narrow exceptions:

Certain religious groups (Amish, Mennonite) can opt out of Social Security (lose all future benefits)
Some state/local government workers are exempt if covered by alternate pension
Foreign students on F-1/J-1 visas in their first 5 years are exempt from FICA
Self-employed earning under $400/year owe no SE tax

For everyone else, FICA is mandatory.

FICA FAQ

Q: Why is FICA so high on my paycheck? A: 7.65% feels significant. Combined with federal income tax (10-37%) and state tax (0-13%), your total withholding can easily be 25-40% of gross. This is why net pay feels much smaller than gross salary.

Q: Does FICA apply to bonuses? A: Yes. Bonuses are taxed as supplemental wages for federal income tax (22% flat OR aggregate method), but FICA is the same 7.65% as regular wages.

Q: Does FICA apply to 401(k) contributions? A: 401(k) contributions are excluded from federal AND state income tax in the year of contribution. BUT they are still subject to FICA. So FICA is calculated on your GROSS wages before 401(k).

Q: Do I owe FICA on tips? A: Yes. Reported tips are subject to FICA tax. Employers must collect FICA on reported tips through payroll. Unreported tips technically still owe FICA, paid by the worker via Form 4137.

Q: What about Roth 401(k) contributions and FICA? A: Same as traditional 401(k) — FICA is calculated on gross wages before any 401(k) contributions. So Roth 401(k) doesn’t help reduce FICA (only federal income tax in the year of distribution).

Take-Home Pay Calculator — Including FICA
Self-Employment Tax Calculator — Full 15.3%
Salary Calculator — Gross to net
Tax Calculator — Federal income tax
Take-Home Pay (Texas) — State-specific examples

FICA is one of the most consistent and universal taxes — almost every working American pays it. Knowing exactly what it funds and how it’s calculated helps you make sense of your paycheck.