FICA tax is a fixed percentage of your paycheck that funds Social Security and Medicare

FICA tax is not a choice or a variable amount — it is a set percentage taken from every paycheck. The rate is 6.2% for Social Security and 1.45% for Medicare, totaling 7.65% of your gross wages. Your employer matches this amount, so they also pay 7.65% on your behalf. If you are self-employed, you pay both the employee and employer portions yourself, which comes to 15.3%.

The amount you pay depends only on how much you earn. A person making $50,000 per year pays roughly $3,825 in FICA tax. Someone making $100,000 pays roughly $7,650. The percentage stays the same regardless of income, with one exception: the Social Security portion stops once you reach a wage cap, which changes each year. In 2024, that cap is $168,600 — meaning you stop paying the 6.2% Social Security tax once your earnings exceed that amount. Medicare tax, however, has no cap and continues on all income.

Key Takeaways

  • FICA tax is 7.65% of your paycheck: 6.2% for Social Security and 1.45% for Medicare.
  • Your employer pays an equal 7.65%, so the total cost to fund these programs is 15.3% of your wages.
  • Social Security tax stops once you earn above the annual wage cap, which was $168,600 in 2024 and increases most years.
  • Medicare tax has no income limit and continues on all earnings, plus an additional 0.9% tax applies to high earners.
  • Self-employed people pay both the employee and employer share, totaling 15.3% for Social Security and Medicare combined.

How the Social Security portion works

The 6.2% Social Security tax funds the program that pays retirement, disability, and survivor benefits. You see this line item on your pay stub as "Social Security" or "OASDI" (Old-Age, Survivors, and Disability Insurance). The amount you pay over your working years determines how much you receive later — higher lifetime earnings mean higher benefits, but the relationship is not one-to-one.

The wage cap means high earners pay a smaller percentage of total income toward Social Security. If you earn $200,000 per year, you pay 6.2% only on the first $168,600 (in 2024), not on the remaining $31,400. This is why Social Security is sometimes described as a regressive tax — it takes a smaller slice of income from people who earn more. The cap increases most years based on wage growth, so the threshold changes annually.

How the Medicare portion works

The 1.45% Medicare tax funds the hospital insurance part of Medicare (Part A). Unlike Social Security, there is no wage cap — you pay 1.45% on every dollar you earn, no matter how much that is. This appears on your pay stub as "Medicare" or "HI" (Hospital Insurance).

High earners face an additional Medicare tax of 0.9% on wages above $200,000 (if single) or $250,000 (if married filing jointly). This extra tax was added in 2013 and applies only to income above those thresholds. So a single person earning $250,000 pays the standard 1.45% on all $250,000, plus an extra 0.9% on the $50,000 above $200,000.

What happens if you change jobs or work multiple jobs

FICA tax is withheld from every paycheck, regardless of how many employers you have. If you work two jobs simultaneously, each employer withholds FICA tax based on your earnings at that job alone. This means you could temporarily pay more than the Social Security wage cap if your combined earnings exceed it.

When you file your tax return, you report all income and the IRS reconciles your total Social Security tax paid against the wage cap. If you overpaid because of multiple jobs, you receive a refund of the excess Social Security tax. Medicare tax does not have this refund mechanism — you simply pay 1.45% on all earnings, plus the 0.9% surtax if applicable. The IRS handles this automatically when you file; you do not need to request it.

Self-employment and FICA tax

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

Self-employed people can deduct half of their self-employment tax when calculating adjusted gross income, which reduces taxable income slightly. You also pay self-employment tax quarterly through estimated tax payments, rather than having it withheld from a paycheck. The Social Security wage cap still applies, so once your net self-employment income reaches the annual threshold, you stop paying the 12.4% Social Security portion on additional income.

Why FICA tax rates and caps change

The 6.2% and 1.45% rates have been in place since 1990 and 1966 respectively, and Congress would need to pass new legislation to change them. The wage cap, however, adjusts automatically each year based on the national average wage index. In recent years it has increased by $1,000 to $2,000 annually. The Social Security Administration publishes the new cap in October for the following year.

These rates and caps are set by federal law, not by your employer or the IRS. Your employer's only role is to withhold the correct amount and send it to the government. You cannot opt out of FICA tax, negotiate a lower rate, or defer payment — it is mandatory for all workers earning wages or self-employment income.

How to read your pay stub and verify FICA tax

Your pay stub shows FICA tax in two places: the employee portion withheld from your paycheck, and sometimes a note about the employer portion (though employers are not required to show the employer match on your stub). Look for line items labeled "Social Security," "OASDI," "Medicare," or "HI." The amount should equal 6.2% of your gross pay for Social Security and 1.45% for Medicare, unless you have already hit the Social Security wage cap this year.

If you earn over the wage cap, the Social Security withholding should stop appearing on paychecks once you cross the threshold. Your year-end W-2 form shows total wages and total FICA tax paid, which you can use to verify the calculation. If something looks wrong — for example, if Social Security tax continues after you have earned above the cap — contact your employer's payroll department to correct it.

Frequently Asked Questions

Can I reduce or avoid FICA tax?

No. FICA tax is mandatory for all employees and self-employed people. You cannot opt out, reduce the rate, or defer payment. The only exception is certain religious groups that have received a federal exemption, which requires a specific application process and IRS approval.

What if I did not pay FICA tax in a previous year?

If you were employed and FICA tax was not withheld, contact your employer first — they may have made a payroll error. If the employer is unresponsive or no longer in business, contact the IRS at 1-800-829-1040. You may owe back taxes plus interest and penalties, but the IRS can work out a payment plan if needed.

Does FICA tax count toward my income tax?

No. FICA tax and income tax are separate. FICA tax funds Social Security and Medicare. Income tax funds general government operations. Both are withheld from your paycheck, but they are calculated independently and go to different accounts.

What if I work part-time or earn very little?

You still pay FICA tax on every dollar earned, even if you earn below the standard deduction for income tax purposes. A teenager earning $5,000 at a summer job pays roughly $383 in FICA tax and owes no income tax. Self-employed people pay self-employment tax on net earnings above $400, regardless of income tax liability.