FICA Taxes Explained: Social Security and Medicare

Look at any pay stub and you will find a line called FICA, or two lines called Social Security and Medicare. It is one of the biggest deductions for most people, and it is the same in all 50 states. This guide explains what it pays for, how it is worked out and what changes at higher incomes.

What FICA stands for

FICA is the Federal Insurance Contributions Act, the law that sets payroll taxes for Social Security and Medicare. Those two programs are paid for in large part by these taxes, not by income tax. FICA is a separate tax from federal income tax, and it is figured separately on the same pay.

The 2026 rates

The IRS states these rates in Topic 751 and in Publication 15: 6.2% each for employer and employee for Social Security, 1.45% each for Medicare, a wage base of $184,500 for 2026 and no wage base for Medicare. Together, a regular employee pays 6.2% + 1.45% = 7.65% from their pay, and the employer pays another 7.65%.

Worked examples

Notice two things. First, FICA starts with the first dollar you earn. There is no standard deduction for it. Second, once your wages pass $184,500, the Social Security part stops, so your FICA share of pay gets smaller as your income goes up. At $250,000 it is 6.21%.

To see FICA next to federal and state income tax on your own salary, use our paycheck calculator. It shows each line of a paycheck, and the same numbers are used in the examples above.

The Additional Medicare Tax at $250,000 is 0.9% × ($250,000 − $200,000) = $450.

The Additional Medicare Tax and your filing status

Your employer must start withholding the 0.9% Additional Medicare Tax when your wages pass $200,000 in a year, no matter your filing status. But what you actually owe is worked out on your tax return, and the threshold depends on your filing status:

• Single, head of household or qualifying surviving spouse: $200,000.
• Married filing jointly: $250,000.
• Married filing separately: $125,000.

Here is why that matters. A married couple who each earn $150,000 has no Additional Medicare Tax withheld, because neither employer sees more than $200,000. But together they earn $300,000, which is above the $250,000 threshold for a joint return, so they owe 0.9% of the $50,000 above it, which is $450, when they file. The IRS also says employers do not match this tax, and any extra amount withheld is credited on your return.

What FICA does not reduce, and what it does

• Traditional 401(k) contributions are not subject to income tax at the time you contribute, but they still count as wages for Social Security and Medicare. A $6,000 contribution does not lower your FICA.
• Health insurance premiums paid through a cafeteria plan (Section 125) are generally exempt from FICA as well as income tax. This lowers your FICA a little.
• Roth 401(k) contributions are taxed for income tax and for FICA.

If you work for yourself

Self-employed people pay both halves. The IRS calls this the self-employment tax. It is 12.4% for Social Security (up to the same $184,500 base) plus 2.9% for Medicare, on 92.35% of your net profit. The 92.35% factor puts self-employed people on the same footing as employees, because an employer's half of FICA is never counted as the employee's pay.

Example: $100,000 of net profit. The base is $92,350. Social Security is $11,451, Medicare is $2,678 and the total is about $14,130. You can deduct half of it, about $7,065, from your income when you work out income tax. Anyone with $400 or more of net earnings from self-employment must pay it.

The guide on 1099 vs W-2 taxes for freelancers shows how this compares with being an employee, with a full example.

Why the wage base changes every year

The Social Security wage base is adjusted each year with average wage growth. It was lower in earlier years and rises most years. Medicare has never had a base. If you earn near the base, the amount of Social Security tax you pay in a year can change a lot just because of when you cross it. Someone earning $200,000 will see their Social Security line stop partway through the year, and their paycheck will jump in the last few weeks. That is normal.

What FICA pays for

• Social Security pays retirement, disability and survivor benefits. Your future benefit is based on your earnings record, which is built from the wages on which you paid Social Security tax.
• Medicare pays for hospital and medical insurance for people aged 65 and over and for some younger people with disabilities.

You can see your own earnings record and benefit estimates in your account at ssa.gov. It is worth checking the record once a year, because the benefit depends on it.

Frequently asked questions

What is the FICA tax rate for 2026?

For employees it is 7.65%: 6.2% for Social Security on wages up to $184,500 and 1.45% for Medicare on all wages. Employers pay a matching 7.65%.

Is FICA the same as income tax?

No. FICA funds Social Security and Medicare. Federal income tax funds the general budget. Each is worked out separately on your pay.

How much is the maximum Social Security tax in 2026?

An employee pays at most 6.2% × $184,500 = $11,439. An employer pays the same.

Do bonuses have FICA taken out?

Yes. Bonuses are wages and are subject to Social Security and Medicare tax, up to the limits above.

Why is FICA taken even if I owe no income tax?

Because it is a different tax. A worker with a low income may pay no federal income tax after the standard deduction, but FICA still applies to every dollar of wages.

Can I stop paying FICA?

Not on regular wages. A few kinds of work are exempt in special cases, such as some student employment and some religious or government jobs, but ordinary employees cannot opt out.

Why is my Social Security tax zero at the end of the year?

You have passed the wage base. Once your wages for the year reach $184,500 in 2026, your employer stops taking the 6.2% tax until January.

The bottom line

FICA is 7.65% of wages for most employees, with the Social Security part stopping at $184,500 in 2026 and an extra 0.9% Medicare tax above $200,000. It is the same in every state, and a 401(k) does not lower it. Knowing that makes every pay stub easier to read.

Sources

• Topic no. 751, Social Security and Medicare withholding rates, Internal Revenue Service
• Topic no. 560, Additional Medicare tax, Internal Revenue Service
• Publication 15 (2026), Employer's Tax Guide (Circular E), Internal Revenue Service
• 401(k) resource guide: plan participants, 401(k) plan overview, Internal Revenue Service
• Self-employment tax (Social Security and Medicare taxes), Internal Revenue Service
• Contribution and Benefit Base, Social Security Administration

Tax year 2026. The dollar examples are worked out by script from the rates above. Last reviewed October 12, 2026.