What you pay in FICA and Social Security tax right now

FICA tax comes out of your paycheck in two parts: Social Security tax at 6.2% of your wages, and Medicare tax at 1.45% of your wages. If you earn $50,000 a year, you pay $3,100 in Social Security tax and $725 in Medicare tax — $3,825 total. Your employer pays an equal amount on your behalf, though you do not see that money.

The Social Security tax rate of 6.2% has been the same since 1990. It applies only to wages up to a cap, which changes each year. In 2024, the cap is $168,600 — meaning if you earn $200,000, you only pay Social Security tax on the first $168,600. Medicare tax has no cap and applies to all your wages.

These rates are set by federal law and do not change based on your income level, age, or how long you have worked. Everyone who is employed pays the same percentage.

Key Takeaways

  • Social Security tax is 6.2% of your wages up to an annual cap that changes yearly; Medicare tax is 1.45% with no cap.
  • Your employer pays an equal amount of both taxes, but only the employee portion shows as a deduction on your paycheck.
  • The Social Security wage cap means high earners pay the same total Social Security tax as someone earning at the cap, even if they earn more.
  • Self-employed people pay both the employee and employer portions (15.3% total), though they can deduct half on their tax return.

How the Social Security wage cap works

The Social Security tax cap exists because Social Security benefits are designed to replace a portion of your working income, not to be unlimited. Once you earn above the cap in a calendar year, you stop paying Social Security tax on additional wages.

The cap increases most years based on wage growth in the economy. In recent years it has moved like this: $160,200 in 2023, $168,600 in 2024, and $176,100 in 2025. If you change jobs mid-year and earn above the cap at both jobs, you may overpay Social Security tax — but you can claim the overpayment as a credit on your federal tax return.

Medicare tax, by contrast, has no wage cap. High earners also pay an additional 0.9% Medicare tax on wages over $200,000 (single filers) or $250,000 (married filing jointly), which goes toward Medicare funding.

What self-employed people pay

If you are self-employed, you pay both the employee and employer portions of FICA tax — 15.3% total (12.4% for Social Security, 2.9% for Medicare). This is called self-employment tax. You calculate it on your net business income using Schedule SE when you file your tax return.

The Social Security portion still has the annual wage cap. If your net self-employment income is $200,000 and the cap is $168,600, you pay self-employment tax on $168,600 only. The Medicare portion applies to all your net income, plus the additional 0.9% Medicare tax if you exceed the income thresholds.

You can deduct half of your self-employment tax when calculating your adjusted gross income, which reduces your overall tax burden slightly. This deduction roughly mirrors the fact that an employee does not pay tax on the employer portion of FICA.

How FICA tax appears on your paycheck

Your paycheck stub lists FICA deductions separately. You will see a line for "Social Security" or "OASDI" (Old-Age, Survivors, and Disability Insurance) showing 6.2%, and a line for "Medicare" showing 1.45%. Some paycheck stubs also show "Medicare Additional Tax" if you have crossed the high-income threshold.

The amount deducted depends on your gross pay for that pay period. If you are paid biweekly and earn $2,500 per paycheck, one paycheck will have $155 in Social Security tax and $36.25 in Medicare tax deducted. Over a year, those deductions add up to your annual FICA payment.

Your employer also deducts federal income tax, state income tax (if your state has one), and sometimes local taxes. FICA is separate from income tax and is calculated independently.

Why FICA tax rates stay the same

Congress sets FICA tax rates through legislation. The current rates — 6.2% for Social Security and 1.45% for Medicare — have been in place for decades. Congress can change these rates, but it rarely does because doing so requires a new law and affects millions of workers immediately.

The Social Security wage cap, by contrast, is adjusted automatically each year based on a formula tied to national wage growth. This keeps the cap roughly in line with earnings trends without requiring Congress to act annually.

Medicare tax rates have remained stable, though Congress has added the additional 0.9% Medicare tax on high earners (starting in 2013) and has discussed raising rates to address long-term Medicare funding. Any change would require new legislation.

What happens if you overpay FICA tax

Overpayment usually happens when you work multiple jobs in the same year and earn above the Social Security wage cap at each job. Your employers do not coordinate with each other, so each one withholds Social Security tax as if you only work there.

When you file your federal tax return, you report all your wages and FICA taxes paid. If you overpaid Social Security tax, the IRS calculates the refund automatically — you do not need to claim it separately. You will receive the overpayment as part of your tax refund or as a credit against taxes owed.

Medicare tax overpayment is rare because there is no wage cap, but it can happen if you earn above the high-income threshold and multiple employers withhold the additional 0.9% Medicare tax. Again, your tax return will catch this and you will receive a refund.

Frequently Asked Questions

Does FICA tax come out before or after federal income tax?

Both come out of your paycheck at the same time, but they are calculated separately. FICA is a fixed percentage (6.2% Social Security, 1.45% Medicare) with no deductions. Federal income tax is calculated based on your W-4 withholding choices and is reduced by certain deductions. Neither affects the other's calculation.

Can I opt out of paying FICA tax?

No. FICA tax is mandatory for all employees and self-employed people. The only exception is certain religious groups that have received an IRS exemption, which is rare and requires specific documentation. If you are employed, you must pay.

What if I did not pay FICA tax for some years?

If you were employed and FICA was not withheld, you may owe back taxes plus penalties and interest. Contact the IRS or a tax professional to resolve this. If you were self-employed and did not file, you should file amended returns for the years in question as soon as possible to limit additional penalties.

Does FICA tax count toward my income tax refund?

FICA tax and federal income tax are separate. FICA does not reduce your federal income tax liability. However, if you overpay either one, you get a refund. Many people receive a refund because they overpaid federal income tax, not because of FICA.

Why do I pay FICA tax if I might not collect Social Security?

FICA funds three programs: Social Security retirement, Social Security disability, and Medicare. Even if you do not collect retirement benefits, you may receive disability benefits or Medicare coverage at age 65. FICA tax is mandatory regardless of whether you expect to use these programs.