Both you and your employer split the FICA tax bill

FICA tax is split between two parties: you pay half through payroll deductions, and your employer pays the other half directly to the IRS. If you are self-employed, you pay both halves yourself. The split is not optional — it is built into how the tax system works, and the amount each side pays is set by federal law.

For a regular employee in 2024, you see 6.2% of your gross pay withheld for Social Security and 1.45% for Medicare, totaling 7.65%. Your employer sends in an equal 7.65% on your behalf. If you are self-employed, you owe the full 15.3% yourself, though you can deduct half of it when you file taxes.

Key Takeaways

  • Employees pay 6.2% for Social Security and 1.45% for Medicare through paycheck deductions; employers pay an equal amount.
  • Self-employed workers pay both the employee and employer portions, totaling 15.3% of net self-employment income.
  • Your employer's share is a business expense they report to the IRS, separate from what you report on your tax return.
  • Additional Medicare tax of 0.9% applies to wages above $200,000 for single filers and $250,000 for married couples filing jointly, and only the employee pays this portion.

How the employee portion works

When you receive a paycheck, your employer automatically deducts FICA tax before you see the money. This deduction appears on your pay stub as "Social Security" and "Medicare." The amount is calculated on your gross pay — the full salary before any other deductions — and it happens every pay period, whether you are paid weekly, biweekly, or monthly.

You do not have a choice about whether to pay this amount. It is mandatory for all employees, with very few exceptions. Some religious groups and certain government employees have exemptions, but most workers have no option to opt out. The money goes directly from your employer to the U.S. Treasury, not into a personal account with your name on it.

How the employer portion works

Your employer sends their half of FICA tax to the IRS on a schedule set by federal law — usually quarterly, though large employers may pay more frequently. This is a business expense for them, meaning they can deduct it when calculating their own taxes. The employer's share does not come out of your paycheck; it is a separate cost your employer bears.

The employer's portion is still tied to you as an individual employee. Your employer reports how much they paid on your behalf to the IRS, and that information appears on your W-2 form at the end of the year. You do not pay taxes on this amount — it is your employer's obligation — but it counts toward your Social Security and Medicare records.

Self-employed workers pay both portions

If you are self-employed — meaning you run your own business or are a sole proprietor — you owe both the employee and employer shares of FICA tax. This is called self-employment tax, and it totals 15.3% of your net self-employment income (the profit after business expenses).

You calculate self-employment tax on Schedule SE, which you file with your annual tax return. The IRS expects you to pay this tax quarterly through estimated tax payments, not in one lump sum at tax time. However, when you file your return, you can deduct half of what you paid as a business expense, which reduces your overall tax burden slightly.

Self-employment tax applies to net income above $400 in a tax year. If your net self-employment income is $400 or less, you do not owe self-employment tax, though you may still want to file a return to claim refundable tax credits.

Additional Medicare tax for high earners

There is a second Medicare tax that applies only to wages above certain thresholds. This Additional Medicare Tax is 0.9% and applies to wages over $200,000 for single filers, $250,000 for married couples filing jointly, and $125,000 for married couples filing separately. Unlike the standard Medicare tax, only the employee pays this portion — employers do not contribute.

Your employer withholds the Additional Medicare Tax automatically once your wages cross the threshold in a given year. If you have multiple jobs or if your spouse also works, you may end up paying more than necessary, but you can claim a credit when you file your tax return to recover the overpayment.

What happens to the money you pay

FICA taxes fund two separate programs: Social Security and Medicare. The 6.2% Social Security portion goes into a trust fund that pays retirement benefits, disability benefits, and survivor benefits. The 1.45% Medicare portion funds hospital insurance (Part A) for people age 65 and older and some younger people with disabilities.

The money is not held in an individual account with your name on it. Instead, current FICA taxes pay current beneficiaries, and your future benefits depend on how much you paid in over your working years. Your earnings record — which the Social Security Administration maintains — determines how much you receive when you retire or become disabled.

How to verify FICA taxes on your pay stub

Your pay stub shows exactly how much FICA tax was withheld each pay period. Look for line items labeled "Social Security" or "OASDI" (Old-Age, Survivors, and Disability Insurance) and "Medicare." These should total 7.65% of your gross pay, unless you earn over the high-income threshold, in which case you will also see the Additional Medicare Tax line.

At the end of the year, your W-2 form shows the total FICA taxes withheld from your paychecks in boxes 4 and 6. Box 4 is Social Security tax withheld; box 6 is Medicare tax withheld. These amounts should match what you saw deducted throughout the year. If they do not, contact your employer's payroll department to correct the record.

Frequently Asked Questions

Can my employer reduce my pay to cover their FICA share?

No. Your employer's FICA contribution is a separate legal obligation they cannot pass to you. Your gross pay is set independently of their tax costs. Some employers may offer lower wages in exchange for other benefits, but that is a separate negotiation — they cannot reduce your stated salary to offset their FICA expense.

What if I disagree with the FICA amount on my pay stub?

First, verify the calculation: multiply your gross pay by 6.2% and 1.45%. If the math is correct, the amount is right. If the deduction is wrong, contact your payroll department immediately. Errors are usually corrected within one pay period. If your employer refuses to fix it, you can file a complaint with the Department of Labor or the IRS.

Do I pay FICA tax on tips or bonuses?

Yes. FICA tax applies to all wages, including tips you report to your employer and bonuses. Tips you do not report are not subject to FICA tax, but you are required by law to report all tips. Bonuses are treated as regular wages for FICA purposes.

What happens to FICA taxes if I change jobs mid-year?

You continue paying FICA tax at each job. Social Security tax stops once you reach the annual wage cap (which changes yearly), but Medicare tax does not have a cap. If you overpay Social Security tax across multiple jobs, you claim the overpayment as a credit when you file your tax return.

Do I pay FICA tax on unemployment benefits?

No. Unemployment benefits are not subject to FICA tax. However, they are subject to federal income tax withholding if you request it. Some states also tax unemployment benefits for state income tax purposes, but FICA does not apply.