FICA taxes come out of your paycheck in two parts: Social Security and Medicare

FICA stands for Federal Insurance Contributions Act. Your employer withholds FICA taxes from each paycheck and sends them to the federal government. The money funds Social Security (retirement, disability, and survivor benefits) and Medicare (health insurance for people 65 and older, and some younger people with disabilities).

FICA has two separate tax rates. Social Security tax is 6.2% of your wages, up to a yearly cap. Medicare tax is 1.45% of all your wages, with no cap. If you earn over $200,000 (or $250,000 if married filing jointly), an additional 0.9% Medicare tax applies to the amount above that threshold. Your employer pays a matching amount for each, so the total FICA cost is split between you and your employer.

The amount withheld depends on your gross pay — the total before any deductions — and how often you are paid. It does not depend on how many dependents you claim or your filing status, the way income tax withholding does.

Key Takeaways

  • Social Security tax is 6.2% of wages up to $168,600 per year (2024), and Medicare tax is 1.45% of all wages with no yearly limit.
  • Your employer withholds both taxes automatically and matches the amount you pay, so the total FICA cost is split equally between you and your employer.
  • Self-employed people pay both the employee and employer share, which totals 15.3% for Social Security and Medicare combined.
  • You can see the exact FICA amounts withheld on your pay stub under "Social Security" and "Medicare" or "FICA".
  • FICA withholding is separate from federal income tax withholding and cannot be reduced by claiming exemptions or adjusting your W-4.

How the Social Security tax cap works

Social Security tax only applies to the first $168,600 of your wages in 2024. Once you earn that amount in a calendar year, no more Social Security tax is withheld from your paychecks for the rest of that year. The cap changes each year based on wage growth — it was $160,200 in 2023 and will be different in 2025.

This means if you earn $200,000 a year, you pay Social Security tax on only $168,600 of it. The remaining $31,400 is not subject to Social Security tax. Medicare tax, by contrast, has no cap and applies to every dollar you earn.

If you work for more than one employer in the same year, each employer withholds Social Security tax independently. You could end up overpaying if your combined wages exceed the cap. When you file your tax return, you can claim a refund for the overpayment on your federal income tax return.

How to read FICA amounts on your pay stub

Your pay stub shows FICA withholding in a section usually labeled "Taxes" or "Deductions." Look for line items that say "Social Security," "Medicare," "FICA," or sometimes "OASDI" (Old-Age, Survivors, and Disability Insurance, which is the Social Security program). The amount next to each should match the percentages: 6.2% for Social Security and 1.45% for Medicare.

To verify the calculation, take your gross pay for that period and multiply it by 0.062 for Social Security (or 0.015 for the additional Medicare tax if you earn over the threshold). The result should match what appears on your stub. Small rounding differences of a few cents are normal.

Some pay stubs also show a "year-to-date" total for FICA taxes. This running total helps you track whether you have hit the Social Security cap. Once the year-to-date Social Security withholding stops increasing, you have reached the cap for that year.

Self-employed FICA taxes and Schedule SE

If you are self-employed, you pay both the employee and employer share of FICA taxes. This totals 15.3% for Social Security (12.4%) and Medicare (2.9%), plus the additional 0.9% Medicare tax if your net self-employment income exceeds the threshold.

You calculate self-employment tax on Schedule SE, a form you file with your tax return. Schedule SE takes your net self-employment income (what you earned minus business expenses), applies the FICA rates, and tells you how much you owe. You then report this amount on your Form 1040 and pay it when you file your return, usually once a year.

Self-employed people can deduct half of their self-employment tax as an adjustment to income on their tax return. This reduces your taxable income but does not reduce the FICA tax itself. You still owe the full 15.3% (or more with the additional Medicare tax), but half of it lowers your federal income tax.

What happens if you underpay or overpay FICA

If your employer withholds too little FICA tax, you will owe the difference when you file your tax return. This is rare because FICA withholding is automatic and based on a straightforward formula. It can happen if your employer makes a payroll error or if you work multiple jobs and do not report all of them.

If you overpay — most commonly by working for two employers whose combined withholding exceeds the Social Security cap — you can claim a refund on your Form 1040. The IRS will refund the overpayment as part of your tax refund or apply it to taxes you owe.

Self-employed people who underpay estimated taxes throughout the year may owe penalties and interest when they file. The IRS expects you to pay estimated taxes quarterly if you expect to owe $1,000 or more. You can avoid penalties by paying 90% of your current year tax or 100% of your prior year tax (110% if your prior year income was over $150,000), whichever is smaller.

FICA taxes for specific situations

Some types of income are not subject to FICA tax. Investment income like dividends, interest, and capital gains does not trigger FICA withholding. Certain government employees hired before 1984, some religious workers, and nonresident aliens may be exempt from FICA taxes under specific rules.

If you receive tips, your employer should withhold FICA taxes on the tips you report. If you do not report tips to your employer, you still owe FICA tax on them when you file your return. Gig economy workers and contractors should report all income and pay self-employment tax on it, even if they receive a 1099 form instead of a W-2.

Employees who are not U.S. citizens may have different FICA obligations depending on their visa status. F-1 students, for example, are generally exempt from Social Security and Medicare taxes on wages earned from on-campus employment, but not off-campus work. Check with your employer's payroll department if you are unsure whether FICA applies to your situation.

Frequently Asked Questions

Can I reduce my FICA taxes by changing my W-4?

No. FICA taxes are mandatory and calculated automatically based on your gross pay. Changing your W-4 form only affects federal income tax withholding, not FICA. The only way to reduce FICA is to earn less income or, if self-employed, to reduce your net business income through legitimate business expenses.

What if I work part-time and earn under the Social Security cap?

You still pay the full 6.2% Social Security tax on every dollar you earn, even if your total income is well below the $168,600 cap. The cap only matters if you earn more than that amount in a single year. Part-time workers pay FICA on all their wages.

Do I get FICA taxes back when I file my return?

FICA taxes are not refundable like federal income tax can be. However, if you overpaid Social Security tax (usually by working multiple jobs), you can claim a refund for the overpayment. Medicare tax overpayments are also refundable. You cannot get back FICA taxes you paid on income you earned.

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

FICA funds not only retirement benefits but also disability insurance and survivor benefits for your family. Even if you never collect retirement benefits, FICA taxes protect you and your dependents if you become disabled or die. The money also funds Medicare, which most people use after age 65 regardless of their work history.

How do I know if I have paid enough FICA to get Social Security benefits?

Social Security requires 40 work credits to receive retirement benefits, which usually means working about 10 years. You earn credits based on your income and FICA contributions, not the number of years worked. You can check your earnings record and estimated benefits on the Social Security Administration website using your personal account, or call 1-800-772-1213 to request a statement.