What Gets Calculated and When

FICA taxes are calculated on your gross pay — the amount before any deductions — every time you receive a paycheck. Your employer withholds Social Security tax at 6.2% and Medicare tax at 1.45% from each paycheck. If you are self-employed, you pay both the employee and employer portions, which totals 15.3% on your net self-employment income.

The calculation happens the same way whether you are paid weekly, biweekly, monthly, or any other schedule. Your employer takes your gross pay for that period, multiplies it by the tax rate, and sends that amount to the IRS along with their matching contribution. You see the deduction on your pay stub as "FICA", "Social Security", or "Medicare" — sometimes listed separately, sometimes combined.

Key Takeaways

  • Social Security tax is 6.2% of your gross pay up to a yearly wage cap (the cap changes annually and was $168,600 in 2024).
  • Medicare tax is 1.45% of all your gross pay with no yearly cap, plus an extra 0.9% on income over $200,000 if you are single.
  • Self-employed workers calculate FICA on net self-employment income after subtracting business expenses, then pay 15.3% total.
  • Your employer withholds FICA automatically; you do not need to calculate it yourself unless you are self-employed or have multiple jobs.

How the Social Security Portion Works

Social Security tax has a wage base limit that resets every January. Once you earn that amount in a calendar year, no more Social Security tax comes out of your paychecks for the rest of the year. In 2024, that limit was $168,600. In 2025, it is $176,100. The IRS announces the new limit each October for the following year.

To calculate your Social Security withholding for a single paycheck, multiply your gross pay by 0.062. If you earn $2,000 biweekly, your Social Security tax is $2,000 × 0.062 = $124. If you have already hit the wage cap earlier in the year, your employer stops withholding Social Security tax on subsequent paychecks, even though Medicare tax continues.

This is why people who change jobs mid-year or work multiple jobs sometimes overpay Social Security tax. If you earn $100,000 at one job and $80,000 at another in the same year, you will pay Social Security tax on both amounts even though the total exceeds the cap. You can claim the overpayment as a credit on your tax return.

How the Medicare Portion Works

Medicare tax is simpler than Social Security because it has no wage cap. Your employer withholds 1.45% of every dollar you earn, no matter how much you make. On a $2,000 paycheck, that is $2,000 × 0.0145 = $29.

If your income exceeds certain thresholds, an additional Medicare tax of 0.9% kicks in. For single filers, the threshold is $200,000 per year. For married couples filing jointly, it is $250,000. For married filing separately, it is $125,000. Your employer is required to withhold this extra 0.9% once you cross the threshold in a calendar year.

Unlike Social Security, there is no refund for the extra Medicare tax. You pay it for the entire year on income above the threshold. If you are self-employed, you calculate and pay it yourself when you file your tax return.

Calculating FICA if You Are Self-Employed

Self-employed workers do not have an employer to withhold taxes, so you calculate FICA yourself on net self-employment income. Net self-employment income is your business revenue minus business expenses (supplies, equipment, rent, utilities, and so on).

The calculation has two steps. First, multiply your net self-employment income by 0.9235 to account for the fact that you can deduct half of your self-employment tax. Then multiply that result by 0.153 (the combined 15.3% rate). For example, if your net self-employment income is $50,000: $50,000 × 0.9235 = $46,175, then $46,175 × 0.153 = $7,065 in FICA taxes.

You pay self-employment tax when you file your annual tax return using Schedule SE. You can also make quarterly estimated tax payments to avoid a large bill at tax time. The IRS provides worksheets and online tools to help you calculate what to pay each quarter.

What Happens When You Have Multiple Jobs

If you work two or more jobs in the same year, each employer calculates and withholds FICA based only on the pay from their job. Neither employer knows about your other income. This can result in overpaying Social Security tax if your combined earnings exceed the wage cap.

For example, if you earn $100,000 at Job A and $80,000 at Job B, you will pay Social Security tax on both amounts totaling $11,160 ($180,000 × 0.062). However, the wage cap is $176,100 in 2025, so you should only pay $10,918 ($176,100 × 0.062). You overpaid by $242.

To recover the overpayment, you claim it on your tax return when you file. The IRS will refund the excess amount or apply it to taxes you owe. You cannot ask your employer to recalculate or refund the overpayment directly.

Reading Your Pay Stub

Your pay stub shows FICA withholding in a line item, usually labeled "FICA", "Social Security", "Medicare", or broken into separate lines for each. The amount shown is what your employer withheld from that specific paycheck. Some pay stubs also show a year-to-date total so you can track how much you have paid in FICA taxes since January.

If you notice the FICA amount seems wrong, check whether you have already hit the Social Security wage cap. If you have, Social Security tax should stop appearing on your pay stub even though Medicare tax continues. If Social Security tax is still being withheld after you have earned more than the wage cap, contact your payroll department to correct it.

You can also use your pay stub to estimate your annual FICA tax. Multiply the year-to-date FICA amount by the number of pay periods in a year, then divide by the number of pay periods you have completed so far. This gives you a rough projection of your total FICA tax for the year.

Frequently Asked Questions

Do I pay FICA taxes on tips?

Yes. Tips are considered wages for FICA purposes. Your employer should include reported tips in your gross pay when calculating FICA withholding. If you receive cash tips that you do not report to your employer, you are still legally required to pay FICA tax on them when you file your tax return.

What if my employer did not withhold FICA taxes?

Contact your payroll or HR department immediately. FICA withholding is mandatory, and your employer is breaking the law if they are not doing it. If your employer refuses to correct it, you can file a complaint with the IRS using Form 13909 or contact your state labor department.

Can I reduce my FICA taxes by claiming more allowances?

No. FICA taxes are separate from income tax withholding and do not change based on your W-4 form. Your W-4 only affects federal income tax withholding. FICA is always calculated as a fixed percentage of your gross pay, with no adjustments for personal circumstances.

Do I pay FICA on unemployment benefits?

No. Unemployment benefits are not subject to FICA tax. However, they are subject to federal income tax withholding if you request it. Some states also tax unemployment benefits as income tax.

What happens to FICA taxes I pay?

Social Security tax funds the Social Security retirement, disability, and survivor benefit programs. Medicare tax funds the Medicare hospital insurance program. Both are held in trust funds managed by the Social Security Administration and Centers for Medicare and Medicaid Services. Your FICA contributions determine your future benefit amounts.