The 2024 FICA rate is 15.3% total: 12.4% for Social Security and 2.9% for Medicare

FICA taxes in 2024 split into two parts. Social Security takes 12.4% of your wages up to a cap, and Medicare takes 2.9% of all wages with no cap. If you are self-employed, you pay both the employee and employer portions, which totals 15.3% on net earnings. If you work for an employer, they pay half and you pay half — so you see 7.65% withheld from your paycheck.

The Social Security wage base for 2024 is $168,600. That means you pay the 12.4% Social Security tax only on earnings up to that amount. Once you hit $168,600 in a calendar year, Social Security tax stops. Medicare has no wage cap, so you pay 2.9% on every dollar you earn, no matter how much.

There is also an Additional Medicare Tax of 0.9% that applies to high earners. If you make over $200,000 as a single filer or $250,000 as married filing jointly, you pay an extra 0.9% Medicare tax on the amount above those thresholds. Self-employed people pay this on net self-employment income above those same limits.

Key Takeaways

  • The Social Security portion of FICA is 12.4% on wages up to $168,600 in 2024, then stops for the rest of the year.
  • The Medicare portion is 2.9% on all wages with no upper limit, plus an additional 0.9% if you earn over $200,000 (single) or $250,000 (married filing jointly).
  • If you work for an employer, they withhold 7.65% from your paycheck and pay the other 7.65% themselves.
  • Self-employed workers pay the full 15.3% on net earnings, though they can deduct half of it as a business expense on their tax return.

How the Social Security wage cap works in practice

The $168,600 cap means that once you earn that much in a single calendar year, no more Social Security tax comes out of your paycheck for the rest of 2024. If you earn $200,000 in a year, you pay Social Security tax only on the first $168,600. The remaining $31,400 is not subject to the 12.4% Social Security tax.

This matters most if you change jobs mid-year or have multiple employers. If you work two jobs and earn $100,000 at the first job and $80,000 at the second, you will pay Social Security tax on both amounts because your total is $180,000 — but only $168,600 of it should have been taxed. You can claim a credit for the overpayment when you file your tax return, but you have to catch it yourself. The IRS does not automatically refund excess Social Security tax.

Medicare tax has no wage cap, so it keeps coming out of every paycheck all year long, no matter how much you earn.

Self-employment FICA taxes and the deduction

If you are self-employed, you pay FICA taxes on your net self-employment income — that is, your business income minus business expenses. You pay the full 15.3% (12.4% for Social Security up to $168,600 in net earnings, plus 2.9% for Medicare on all net earnings). You also pay the Additional Medicare Tax of 0.9% if your net self-employment income is high enough.

The self-employment tax is calculated on Schedule SE, which you file with your tax return. Once you know your self-employment tax, you can deduct half of it on your Form 1040. This deduction reduces your taxable income, which lowers your income tax bill. The deduction does not reduce the self-employment tax itself, only your income tax.

Self-employed people often pay estimated taxes four times a year to avoid a large bill at tax time. The IRS provides Form 1040-ES to help you calculate what to send in each quarter.

Why FICA rates stayed the same from 2023 to 2024

The FICA tax rates themselves — 12.4% for Social Security and 2.9% for Medicare — have not changed since 1990. What does change each year is the Social Security wage base, which is adjusted for inflation. In 2023, the wage base was $160,200. In 2024, it rose to $168,600 because of wage growth in the economy.

Congress sets the FICA tax rates by law, and changing them requires a new law. The rates have remained stable for over three decades. The wage base adjustment is automatic and happens every January based on the average wage index from two years prior.

How FICA taxes fund Social Security and Medicare

The 12.4% Social Security tax you pay goes into the Social Security Trust Fund, which pays retirement benefits, disability benefits, and survivor benefits. The 2.9% Medicare tax funds Part A of Medicare, which covers hospital insurance. These are not savings accounts in your name — they are payroll taxes that fund the programs for current beneficiaries.

When you retire, your own Social Security benefits are paid from the taxes that current workers contribute. The amount you receive depends on your earnings history and the age at which you claim, not on how much you paid in.

Frequently Asked Questions

Do I pay FICA taxes on all my income?

No. FICA taxes apply only to wages from employment or net self-employment income. They do not apply to investment income, rental income, or other passive income sources. However, if you have both W-2 wages and self-employment income, you pay FICA on both.

What happens if I work for two employers and exceed the Social Security wage base?

You will overpay Social Security tax because each employer withholds based on what they pay you alone, not your total income. You can claim a credit for the overpayment on your tax return. The IRS will refund the excess when you file.

Can I opt out of paying FICA taxes?

No. FICA taxes are 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 approval.

Does the Additional Medicare Tax apply to self-employed income?

Yes. If your net self-employment income puts you over the threshold ($200,000 single or $250,000 married filing jointly), you pay an additional 0.9% Medicare tax on the excess. This is calculated on Schedule SE along with your regular self-employment tax.