FICA is calculated as a percentage of your gross pay, taken out before you see your paycheck

FICA taxes come out of your paycheck in two parts: Social Security and Medicare. Your employer withholds these amounts based on a percentage of what you earn, then sends the money to the federal government. The calculation is straightforward — it's a fixed percentage applied to your wages, with a cap on Social Security but not on Medicare.

The current rates are 6.2% for Social Security and 1.45% for Medicare, taken from your pay. Your employer also pays an equal amount on your behalf, though you don't see that deducted from your check. If you're self-employed, you pay both the employee and employer portions, which totals 15.3% before any cap or threshold adjustments.

Key Takeaways

  • Social Security is 6.2% of your wages up to a yearly cap (the cap changes each year and was $168,600 in 2024).
  • Medicare is 1.45% of all your wages with no upper limit, plus an additional 0.9% if you earn over $200,000 as a single filer.
  • Your employer withholds these amounts and sends them to the IRS; you see the deduction on your pay stub as "FICA" or listed separately as "Social Security" and "Medicare".
  • Self-employed people calculate FICA on net earnings from self-employment and pay the full 15.3% (or 16.2% with the additional Medicare tax).
  • FICA is separate from federal income tax withholding and is not optional — it applies to nearly all wages and self-employment income.

How Social Security tax is calculated with the wage cap

Social Security tax is 6.2% of your gross wages, but only up to a maximum amount each year. That maximum is called the wage base, and it changes annually. In 2024, the wage base was $168,600, meaning you pay Social Security tax on the first $168,600 you earn in that year, but not on anything above it.

Here's a concrete example: if you earn $50,000 in a year, you pay 6.2% on the full $50,000, which is $3,100. If you earn $200,000, you pay 6.2% only on the first $168,600 (in 2024), which is $10,453.20, and nothing on the remaining $31,400. The wage base increases most years to account for inflation, so the cap will be higher in 2025.

If you work for multiple employers in the same year, each one withholds Social Security tax independently. You might end up paying more than the annual cap requires. When that happens, you can claim the overpayment as a credit on your tax return, and the IRS will refund it.

How Medicare tax is calculated with no wage cap

Medicare tax is 1.45% of your gross wages, and there is no upper limit. Unlike Social Security, Medicare applies to every dollar you earn, no matter how much that is. This means a person earning $500,000 pays Medicare tax on the full $500,000.

There is an additional Medicare tax of 0.9% that kicks in at higher income levels. For single filers, this extra tax applies to wages over $200,000. For married couples filing jointly, it applies to combined wages over $250,000. For married filing separately, it applies to wages over $125,000. This additional 0.9% is also withheld by your employer if your wages cross the threshold.

If you have multiple jobs or income sources, your employers may not know about your other income, so they might not withhold the additional Medicare tax correctly. You can adjust your withholding using Form W-4, or you may owe the difference when you file your tax return.

What appears on your pay stub and how to read it

Your pay stub shows FICA deductions in one of two ways: either as a single line labeled "FICA" or as two separate lines for "Social Security" and "Medicare." The amount listed is what your employer withheld from your gross pay that period. If you're paid weekly, the amount will be roughly one-fifty-second of your annual FICA; if you're paid biweekly, it will be roughly one twenty-sixth.

The pay stub also shows your employer's FICA contribution, though this does not reduce your take-home pay — it's money your employer sends to the government on your behalf. You'll see this listed separately, often labeled "Employer Social Security" and "Employer Medicare" or "Employer FICA."

Your annual W-2 form, which you receive by January 31st each year, summarizes all FICA withheld from your paychecks for that year. Box 4 shows total Social Security tax withheld, and Box 6 shows total Medicare tax withheld. These numbers should match what you see across all your pay stubs for that year added together.

How self-employed people calculate FICA

If you're self-employed, you pay FICA as self-employment tax on your net earnings from self-employment. Net earnings means your business income minus business expenses and a deduction for half of your self-employment tax itself. You calculate this on Schedule SE (Form 1040), which you file with your tax return.

The self-employment tax rate is 15.3%: 12.4% for Social Security (which is the 6.2% employee portion plus the 6.2% employer portion combined) and 2.9% for Medicare (1.45% plus 1.45%). The Social Security portion still has a wage base cap — in 2024, you paid self-employment tax on net earnings up to $168,600. The Medicare portion applies to all net earnings, plus the additional 0.9% if your total income exceeds the thresholds mentioned above.

Self-employed people typically make quarterly estimated tax payments to cover both income tax and self-employment tax. The IRS provides Form 1040-ES to help you calculate what to pay each quarter. If you underpay, you may owe penalties and interest when you file your return.

FICA deductions for certain groups and situations

Most workers pay FICA on all their wages, but some groups are exempt or have special rules. Certain religious groups that have received an exemption from the IRS do not pay FICA. Some students employed by their school, certain family members working in a family business, and some government employees hired before specific dates may have different FICA treatment.

Nonresident aliens on certain visa types (like F-1 students) may be exempt from Social Security and Medicare taxes on wages earned in the United States, though the rules are complex and depend on the visa category and the country of citizenship. If you think you might fall into an exempt category, you can file Form W-4 with your employer and claim exemption, but you'll need to meet the specific IRS criteria.

Wages paid for domestic work (like a nanny or housekeeper) are subject to FICA if the employer pays that worker $2,700 or more in a calendar year (this threshold changes annually). Agricultural workers have a separate threshold of $20,000 in a year. These thresholds determine whether the employer must withhold and pay FICA on those wages.

What happens to FICA money after it's withheld

Your employer sends the FICA taxes withheld from your paycheck, plus an equal employer contribution, to the IRS. The Social Security portion goes into the Social Security Trust Fund, which pays benefits to retirees, disabled workers, and survivors. The Medicare portion goes into the Medicare Trust Fund, which pays for hospital insurance (Part A) and is used to help fund other Medicare benefits.

FICA is not a savings account in your name. The money you pay in now goes to current beneficiaries, and future workers' FICA will help pay your benefits when you retire or become disabled. Your FICA record is tracked by the Social Security Administration using your Social Security number, and your earnings history determines how much you'll receive in Social Security benefits later.

Frequently Asked Questions

Can I opt out of paying FICA?

No, FICA is mandatory for nearly all workers. The only exceptions are specific religious groups with IRS exemption, certain nonresident aliens on particular visas, and a small number of government employees hired before certain dates. If you think you may have access to for an exemption, you must file Form W-4 with your employer and meet strict IRS criteria.

Why do I pay FICA if I'm already paying federal income tax?

FICA and federal income tax are separate taxes that fund different programs. FICA funds Social Security and Medicare, while federal income tax funds general government operations. Both are withheld from your paycheck, and both are required for most workers.

What if my employer didn't withhold FICA from my paycheck?

Contact your employer immediately and ask them to correct it. If they refuse or go out of business, you can file a complaint with the Department of Labor or the IRS. You may still owe the FICA taxes yourself, but the IRS can pursue your employer for the employer's share and any penalties.

How do I know if I've paid enough FICA for the year?

Your pay stub shows FICA withheld each pay period. Add up all the Social Security and Medicare amounts from your pay stubs throughout the year, and compare them to your W-2 form, which shows the total withheld. If you have multiple jobs, make sure the Social Security withholding doesn't exceed the annual cap, or you can claim the overpayment on your tax return.

Does FICA apply to bonuses and overtime?

Yes, FICA applies to all wages, including bonuses, overtime, and commissions. Your employer withholds FICA on the full gross amount before any deductions. The Social Security portion still stops once you hit the wage base cap for that year, but Medicare continues on all income.