FICA Taxes Explained
The Social Security and Medicare taxes coming out of every paycheck.
By the Easy Guides Editorial Team
What FICA actually is
FICA stands for the Federal Insurance Contributions Act. It's the law that authorizes the federal government to collect Social Security and Medicare taxes from your paycheck. When you see "FICA" on your pay stub, it usually means the combined total of those two taxes.
Some pay stubs split them out as separate lines:
- OASDI or "Social Security", 6.2% of wages up to the wage base
- HI or "Medicare", 1.45% of all wages, no cap
Combined, these total 7.65%, the "FICA tax" your share. Your employer pays a matching 7.65% on your behalf, which you never see on your paycheck but is part of your total compensation cost to your employer.
Social Security tax (6.2%)
Funds Social Security retirement, disability, and survivor benefits. Capped at the annual wage base, which adjusts each year:
| Year | Wage Base | Max You Pay |
|---|---|---|
| 2026 | $184,500 | $11,439 |
| 2025 | $176,100 | $10,918 |
| 2024 | $168,600 | $10,453 |
| 2023 | $160,200 | $9,932 |
Where this comes from: SSA, 2026 COLA fact sheet (wage base set under 42 U.S.C. §430), checked 2026-08-01 · Social Security Act §230 (42 U.S.C. §430); incorporated by IRC §3121(a)(1) for wages and IRC §1402(b) for self-employment income.
Once you've earned more than the wage base in a single year, no more Social Security tax is withheld for the rest of the year. High earners notice their paychecks suddenly get bigger in late October or November, that's why.
Medicare tax (1.45%)
Funds Medicare healthcare for retirees and people with disabilities. No cap. Applies to every dollar of wages, no matter how much you earn.
If your wages exceed $200,000 in a year (single) or your combined wages with your spouse exceed $250,000 (married filing jointly), an additional 0.9% Medicare tax applies to the amount above the threshold. This is the "Additional Medicare Tax" introduced by the Affordable Care Act.
Where this comes from: set by statute, not adjusted annually · IRC §3101(b)(2) (wages); IRC §1401(b)(2) (self-employment income).
The multiple-jobs problem
Each employer withholds Social Security tax up to the wage base, they have no idea about your other jobs. If you have multiple jobs and your combined wages exceed the wage base, you'll have too much Social Security tax withheld. The IRS lets you claim the excess as a credit on your tax return (Schedule 3, Line 11).
For more on this, see our Social Security tax cap guide on W-2 Easy Guide.
FICA for self-employed people
Self-employed people pay both halves of FICA, 12.4% Social Security and 2.9% Medicare, for a total of 15.3%. This is called self-employment tax. Same wage base and additional Medicare rules apply. See 1099 Easy Guide's SE tax explainer for the full picture.
Why you can't reduce FICA
Unlike federal income tax, FICA is not affected by your W-4, pre-tax deductions (mostly), or filing status. The 7.65% comes off the top regardless. The only exception: traditional 401(k) contributions don't reduce FICA wages, but pre-tax health insurance and HSA contributions do reduce FICA wages slightly.
Common questions
What is FICA on my paycheck?
FICA is the payroll tax funding Social Security and Medicare. You pay 6.2% for Social Security up to the yearly wage cap of $184,500 in 2026, plus 1.45% for Medicare on all wages, for 7.65% total.
Where this comes from: SSA, 2026 COLA fact sheet (wage base set under 42 U.S.C. §430), checked 2026-08-01 · Social Security Act §230 (42 U.S.C. §430); incorporated by IRC §3121(a)(1) for wages and IRC §1402(b) for self-employment income.
Does my employer pay FICA too?
Yes. Your employer matches your 7.65% dollar for dollar. Self-employed people pay both halves themselves, which is why self-employment tax is 15.3%.
Can I stop paying FICA?
No. Unlike income tax, there is no way to adjust FICA withholding on your W-4. It applies to wages from the first dollar, though the Social Security half stops once you hit the annual wage cap.
Self-employed? You pay both halves of FICA
Employees split FICA with their employer, but self-employed workers pay the full 15.3% self-employment tax themselves. See how it works on our sister site 1099 Easy Guide.
Self-employment tax explained →