The FICA tax rate is 15.3% of your wages, split between you and your employer

FICA taxes consist of two parts: Social Security at 6.2% and Medicare at 2.9%. If you are an employee, you pay half (8.85% total) and your employer pays the other half. If you are self-employed, you pay both halves yourself, which comes to 15.3% of your net earnings.

The percentage does not change based on how much you earn, but Social Security has an income cap. In 2024, you only pay Social Security tax on the first $168,600 of wages. Medicare tax has no cap and applies to all your earnings. This means higher earners pay a smaller percentage of their total income in Social Security tax, but they pay Medicare tax on everything.

Your employer withholds FICA taxes from each paycheck and sends them to the IRS. You see this on your pay stub as deductions labeled "Social Security" and "Medicare" or sometimes as "OASDI" (Old-Age, Survivors, and Disability Insurance) and "HI" (Hospital Insurance).

Key Takeaways

  • Employees pay 6.2% for Social Security and 2.9% for Medicare, totaling 8.85% of gross wages.
  • Self-employed people pay both the employee and employer share, which is 15.3% of net self-employment income.
  • Social Security tax stops once you reach $168,600 in annual wages (this threshold changes yearly), but Medicare tax continues on all earnings.
  • Additional Medicare tax of 0.9% applies to wages above $200,000 for single filers and $250,000 for married couples filing jointly.

How the Social Security income cap works

Social Security tax only applies to earnings up to a certain amount each year. For 2024, that limit is $168,600. Once you reach that threshold, no more Social Security tax is withheld from your paycheck for the rest of the year.

This cap resets on January 1 each year and typically increases because it is tied to national wage growth. If you change jobs mid-year, each employer withholds Social Security tax independently until you hit the cap across all jobs combined. If you overpay because you worked for multiple employers, you can claim the overage as a credit on your tax return.

Additional Medicare tax for higher earners

On top of the standard 2.9% Medicare tax, there is an additional Medicare tax of 0.9% that applies to wages above certain thresholds. For single filers, the threshold is $200,000. For married couples filing jointly, it is $250,000. For married people filing separately, it is $125,000.

Your employer is responsible for withholding this additional tax once you cross the threshold. Unlike the standard Medicare tax, there is no employer match for the additional Medicare tax — you pay all 0.9% yourself. If you have multiple jobs or expect to exceed the threshold, you can ask your employer to withhold extra Medicare tax to avoid owing money at tax time.

Self-employed FICA calculations

If you are self-employed, you pay both the employee and employer portions of FICA, but the calculation is slightly different. You do not pay FICA on your total business income. Instead, you pay it on your net self-employment income, which is your business profit after deducting business expenses.

You calculate self-employment tax on Schedule SE (Form 1040), which multiplies your net self-employment income by 92.35% and then applies the 15.3% rate. This 92.35% factor accounts for the fact that the employer portion of FICA is deductible as a business expense. You can also deduct half of your self-employment tax as an adjustment to income on your tax return.

Why FICA percentages matter for your take-home pay

FICA taxes are mandatory and come out of your paycheck before you see the money. Understanding the percentages helps you predict your actual take-home pay. If you earn $50,000 a year as an employee, FICA taxes will reduce that by roughly $3,825 (8.85%), assuming you do not hit the Social Security cap.

FICA is separate from federal income tax withholding, state income tax, and local taxes. Your total deductions are usually higher than just FICA. Knowing the FICA percentage helps you understand one piece of why your paycheck is smaller than your gross salary.

FICA rates for household and agricultural workers

If you employ a household worker (nanny, housekeeper, gardener) or agricultural worker, FICA rules may differ. For household workers, you generally owe FICA taxes if you pay them $2,700 or more in a calendar year. For agricultural workers, the threshold is $150 in cash wages in a calendar quarter or $20,000 or more during the year.

As an employer of these workers, you are responsible for withholding and paying FICA taxes. The percentages are the same as for regular employees, but the thresholds for when you must pay are lower. If you hire household or agricultural help, check IRS Publication 926 or speak with a tax professional about your obligations.

Frequently Asked Questions

Does FICA tax come out before or after federal income tax?

FICA and federal income tax are both withheld from your paycheck, but they are separate. FICA is calculated on your gross pay at a flat rate (8.85% for employees). Federal income tax is calculated based on your W-4 form and varies by person. Both appear as separate line items on your pay stub.

What happens to the FICA taxes I pay?

Social Security tax funds Social Security retirement, disability, and survivor benefits. Medicare tax funds Medicare hospital insurance (Part A). These are not savings accounts in your name — the taxes you pay today fund current beneficiaries, and future workers' taxes will fund your benefits when you retire or become disabled.

Can I avoid paying FICA taxes?

No. FICA is mandatory for nearly all employees and self-employed people. Some religious groups have exemptions, and certain nonresident aliens may be exempt, but these are rare. If you are working and earning income, FICA taxes apply.

Why is self-employment tax higher than employee FICA?

Self-employed people pay 15.3% because they cover both the employee share (8.85%) and the employer share (6.45%). Employees only pay 8.85% because their employer pays the other half. The total cost to fund Social Security and Medicare is the same; self-employed people just write both checks themselves.

Does the FICA percentage change every year?

The percentages (6.2% for Social Security and 2.9% for Medicare) have stayed the same for decades. However, the Social Security wage base cap increases most years based on national wage growth. The additional Medicare tax threshold also stays fixed unless Congress changes the law.