FICA takes a fixed percentage of your gross pay, split between Social Security and Medicare

FICA percentage refers to the portion of your paycheck that goes to Social Security and Medicare taxes. The rate is set by federal law and does not change based on your income or how much you earn. As of 2024, the combined FICA rate is 15.3 percent of your gross wages — 12.4 percent for Social Security and 2.9 percent for Medicare. Your employer withholds half of this (7.65 percent) from your paycheck, and your employer pays the other half directly to the government. If you are self-employed, you pay both halves yourself.

The percentage stays the same whether you earn $30,000 or $300,000 per year, with one exception: Social Security tax stops applying once you reach a wage cap. In 2024, that cap is $168,600, meaning high earners do not pay Social Security tax on income above that amount. Medicare tax, by contrast, has no cap and continues on all wages.

Key Takeaways

  • FICA is 15.3 percent total: 12.4 percent for Social Security and 2.9 percent for Medicare, split between you and your employer.
  • Your employer withholds 7.65 percent from your paycheck; the other 7.65 percent is paid by your employer and does not appear on your stub.
  • Social Security tax stops once you reach the annual wage cap ($168,600 in 2024), but Medicare tax continues on all income.
  • Self-employed workers pay the full 15.3 percent themselves, though they can deduct half of it as a business expense on their tax return.
  • The percentage is set by Congress and changes only when federal law changes, which happens rarely.

Why the percentage is split between you and your employer

The 15.3 percent FICA tax is divided so that you and your employer each contribute roughly equally. Your employer withholds 7.65 percent from your gross pay before you see it — this appears on your pay stub as "FICA" or broken into "Social Security" and "Medicare" lines. Your employer then sends that money to the IRS along with their own 7.65 percent contribution.

This split exists because Congress designed FICA as a shared responsibility between workers and employers. From your perspective, only the 7.65 percent withheld from your paycheck directly reduces your take-home pay. The employer's 7.65 percent is a cost to them, not to you, though it does affect how much employers are willing to pay in wages.

How the wage cap affects high earners

The Social Security portion of FICA (12.4 percent) only applies to wages up to a certain limit. In 2024, that limit is $168,600. Once you earn more than this amount in a single year, no additional Social Security tax is withheld from your paycheck for the rest of that year.

This means a person earning $200,000 per year pays Social Security tax only on the first $168,600 of income. The remaining $31,400 is not subject to Social Security tax. Medicare tax, however, has no wage cap. A 2.9 percent Medicare tax applies to all wages, no matter how high your income is. Additionally, high earners (over $200,000 for single filers, $250,000 for married filing jointly) pay an extra 0.9 percent Medicare tax on income above those thresholds.

What self-employed workers pay

If you are self-employed, you pay both the employee and employer portions of FICA — the full 15.3 percent. This is called self-employment tax. You calculate it on your net business income (after deducting business expenses) using Schedule SE when you file your tax return.

The IRS allows you to deduct half of your self-employment tax as a business expense, which reduces your taxable income. This deduction partially offsets the burden of paying both halves. Self-employed workers also have the option to make quarterly estimated tax payments to avoid a large bill at tax time, though this is not required if you expect a refund.

When FICA percentages change

The FICA percentage is set by federal law and changes only when Congress passes new legislation. The current rates (12.4 percent for Social Security and 2.9 percent for Medicare) have been in place since 1990 for Medicare and 1983 for Social Security. Changes are rare because they require an act of Congress.

The wage cap for Social Security, by contrast, adjusts every year based on average wage growth in the economy. This means the dollar amount you stop paying Social Security tax changes annually, but the percentage itself remains 12.4 percent. The IRS announces the new wage cap each October for the following year.

How FICA differs from income tax withholding

FICA and federal income tax are two separate withholdings on your paycheck. FICA funds Social Security and Medicare and is a fixed percentage. Federal income tax withholding is based on the W-4 form you fill out with your employer and varies depending on your filing status, number of dependents, and other factors you claim.

You can see both on your pay stub. FICA appears as a single line or broken into "Social Security" and "Medicare." Federal income tax appears as "Federal Withholding" or "FIT." State and local income taxes, if your state or city has them, are separate withholdings as well. None of these are optional — they are all required by law.

Frequently Asked Questions

Does FICA percentage change if I get a raise?

No. The percentage stays the same regardless of your salary. If you earn $40,000 or $400,000, FICA is still 7.65 percent of your gross pay (or 15.3 percent if self-employed). The only change occurs when you cross the Social Security wage cap, at which point Social Security tax stops being withheld for the remainder of that year.

Can I opt out of paying FICA?

No. FICA is mandatory for all employees and self-employed workers. The only exceptions are certain religious groups that have received IRS approval to be exempt, and some government employees in specific pension systems. For most workers, there is no way to avoid FICA withholding.

Why does my paycheck show different FICA amounts each month?

The percentage should be the same each month, but the dollar amount changes if your gross pay changes. If you work overtime, receive a bonus, or have unpaid time off, your gross pay varies, so your FICA withholding varies too. Once you hit the Social Security wage cap, Social Security tax stops, which is why some paychecks late in the year show lower FICA amounts.

Is FICA the same as Social Security and Medicare taxes?

FICA is the umbrella term for both Social Security and Medicare taxes combined. When you see "FICA" on your pay stub, it may be broken down into two lines: one for Social Security (12.4 percent) and one for Medicare (2.9 percent). They are withheld together but fund different programs.