The FICA tax rate is split between two parts: Social Security at 6.2% and Medicare at 2.9%, totaling 15.3% when you count both employee and employer portions
If you are an employee, you pay 6.2% of your wages toward Social Security and 1.45% toward Medicare, which comes to 7.65% total taken from your paycheck. Your employer pays an equal 7.65% on your behalf. Self-employed people pay both the employee and employer share, which is 15.3% total, though they can deduct half of it on their tax return.
These rates have been set by federal law since 1990 for Social Security and since 1992 for Medicare. They do not change year to year based on inflation or economic conditions — Congress would have to pass new legislation to alter them. The only exception is the Additional Medicare Tax, which adds 0.9% for high earners above certain income thresholds.
Key Takeaways
- Employees pay 7.65% of gross wages in FICA taxes (6.2% Social Security, 1.45% Medicare), and employers pay an equal 7.65%.
- Self-employed workers pay the full 15.3% themselves but can deduct half on their tax return.
- The Social Security portion only applies to the first $168,600 of annual income in 2024, but Medicare applies to all income.
- An Additional Medicare Tax of 0.9% applies to wages above $200,000 for single filers and $250,000 for married couples filing jointly.
- FICA rates are set by federal law and do not change annually — they remain constant unless Congress passes new legislation.
How the Social Security portion works differently from Medicare
The 6.2% Social Security tax only applies up to a certain income limit, called the wage base. In 2024, that limit is $168,600 of annual income. Once you earn more than that in a calendar year, you stop paying the 6.2% on the extra amount. This means high earners pay a smaller percentage of their total income toward Social Security than lower-wage workers do.
Medicare, by contrast, has no wage base limit. The 1.45% employee portion applies to every dollar you earn, no matter how much you make. This is why someone earning $500,000 a year pays Medicare tax on all $500,000, but Social Security tax only on the first $168,600.
The wage base amount changes each year based on a formula tied to national wage growth. The Social Security Administration announces the new limit in October for the following year, so the $168,600 figure for 2024 will be different in 2025.
What the Additional Medicare Tax means for higher earners
If your income exceeds certain thresholds, you owe an extra 0.9% Medicare tax on the amount above the limit. 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.
This Additional Medicare Tax applies to wages, self-employment income, and certain investment income. Unlike the regular 1.45% Medicare tax, there is no employer match — you pay the full 0.9% yourself. Your employer is responsible for withholding it from your paycheck once you cross the threshold, though you may owe more or less when you file your tax return if your income changes during the year.
How self-employed FICA taxes differ from employee taxes
If you are self-employed, you pay both the employee and employer share of FICA taxes through what is called self-employment tax. That means you owe 15.3% on your net business income (6.2% for Social Security up to the wage base, and 2.9% for Medicare on all income). You calculate this on Schedule SE and report it when you file your tax return.
The advantage is that you can deduct half of your self-employment tax as a business expense on your tax return, which lowers your taxable income. So while you pay 15.3%, you only report half of it as a cost to your business. This deduction does not reduce the actual tax you owe — it reduces the income that gets taxed at your regular income tax rate.
Self-employed people also have to make quarterly estimated tax payments if they expect to owe $1,000 or more in taxes for the year. This is different from employees, whose FICA taxes are withheld automatically from each paycheck.
Why FICA taxes exist and where the money goes
FICA stands for the Federal Insurance Contributions Act. The Social Security portion funds retirement, disability, and survivor benefits for workers and their families. The Medicare portion funds hospital insurance (Part A) for people age 65 and older and some younger people with disabilities.
These are not savings accounts — the taxes you pay today go directly to current beneficiaries. When you retire, your benefits come from taxes paid by workers at that time. The Social Security Administration and Centers for Medicare and Medicaid Services manage these programs and determine benefit amounts based on your earnings history and age.
What happens if you work multiple jobs or change jobs
If you work more than one job in the same year, each employer withholds Social Security tax up to the wage base limit independently. This means you could end up overpaying Social Security tax if your combined income from all jobs exceeds the wage base. For example, if you earn $100,000 at one job and $80,000 at another, both employers will withhold 6.2% on their full amounts, even though your total income is $180,000.
When you file your tax return, you can claim a credit for the overpayment, and the IRS will refund it to you. Medicare tax does not have this problem because there is no wage base limit — you simply owe 1.45% on all income regardless of how many jobs you have.
If you change jobs mid-year, your new employer does not know how much you already earned at your previous job, so they will withhold FICA taxes as if you are starting fresh. Keep track of your total earnings across all employers so you can report any overpayment when you file your return.
How FICA taxes appear on your pay stub
Your pay stub shows FICA taxes as separate line items. You will see "Social Security Tax" or "OASDI" (Old-Age, Survivors, and Disability Insurance) at 6.2%, and "Medicare Tax" at 1.45%. If you earn over the Additional Medicare Tax threshold, you will also see a line for that 0.9% charge.
These amounts are deducted from your gross pay before you receive your paycheck. Your employer also pays an equal amount on your behalf, but that does not appear on your pay stub — it is a separate cost to the employer. When you file your tax return, you report the FICA taxes withheld in the "Taxes and Credits" section, and they count toward your total tax payment for the year.
Frequently Asked Questions
Do FICA taxes apply to all types of income?
FICA taxes apply to wages and self-employment income. They do not apply to investment income like dividends or capital gains, though the Additional Medicare Tax does apply to certain net investment income for high earners. Retirement account withdrawals are not subject to FICA taxes, though they may be subject to regular income tax.
Can I opt out of paying FICA taxes?
No. FICA taxes are mandatory for all employees and self-employed people. Some religious groups have exemptions from self-employment tax if they meet specific criteria, but these are rare and require IRS approval. If you are an employee, you cannot avoid FICA withholding.
What if I did not pay FICA taxes when I should have?
If you were paid under the table or your employer did not withhold FICA taxes, you are still responsible for paying them. You can file a back tax return and pay what you owe, though you may also owe penalties and interest. The IRS can pursue collection for up to ten years after a tax year ends.
Does FICA tax count toward my income tax?
No. FICA taxes and income taxes are separate. FICA taxes fund Social Security and Medicare. Income taxes fund general government operations. Both are withheld from your paycheck, but they go to different places and serve different purposes.
Will FICA tax rates increase in the future?
The current rates have been in place since 1990 for Social Security and 1992 for Medicare. Any change would require Congress to pass new legislation. The Social Security Administration has warned that the trust fund may need adjustments in the future, but no rate changes are scheduled or certain.