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

FICA stands for Federal Insurance Contributions Act. It funds Social Security and Medicare. Your employer withholds 7.65% from your paycheck, and your employer pays another 7.65% on your behalf — that's the 15.3% total. You see only the 7.65% deducted on your pay stub.

The 7.65% breaks into two parts: 6.2% goes to Social Security, and 1.45% goes to Medicare. If you're self-employed, you pay both halves yourself — 12.4% for Social Security and 2.9% for Medicare — which is why self-employment tax feels steeper.

FICA tax is separate from federal income tax. Your employer withholds both, but they fund different programs and use different rules. FICA has a wage cap for Social Security; Medicare does not.

Key Takeaways

  • FICA tax is 7.65% of your gross wages if you are an employee; your employer withholds this from your paycheck.
  • Your employer also pays 7.65% on your behalf, but you do not see this amount — it is a separate employer cost.
  • Social Security tax stops once you earn $168,600 in a year (2024 limit; this amount changes annually), but Medicare tax continues on all wages.
  • Self-employed workers pay 15.3% total on net earnings from self-employment, because they cover both the employee and employer portions.
  • FICA tax is not the same as federal income tax; both are withheld, but they fund different programs.

How the 7.65% breaks down between Social Security and Medicare

Social Security tax is 6.2% of your wages. This funds retirement, disability, and survivor benefits. Once you earn a certain amount in a year, no more Social Security tax is withheld — that threshold is $168,600 for 2024, but it rises most years. Your employer also stops paying the 6.2% employer portion once you hit that cap.

Medicare tax is 1.45% of your wages, with no upper limit. You pay 1.45% on every dollar you earn, no matter how much you make. Your employer also pays 1.45%. There is an additional 0.9% Medicare tax on wages over $200,000 (single filers) or $250,000 (married filing jointly), but only the employee pays this extra portion.

On a $50,000 annual salary, FICA withholding is $3,825 — that is $3,100 for Social Security (6.2%) and $725 for Medicare (1.45%). Your employer pays another $3,825 on top of your salary.

The wage cap for Social Security but not Medicare

Social Security tax stops partway through the year if you earn above the cap. In 2024, the cap is $168,600. If you earn $180,000, you pay Social Security tax only on the first $168,600 — you stop paying it after that. The next year, the cap usually rises because it is tied to average wage growth.

Medicare has no cap. You pay 1.45% on every dollar, whether you earn $50,000 or $500,000. High earners also pay an extra 0.9% Medicare tax on wages above the income thresholds mentioned above.

This is why high-income workers often see FICA tax drop partway through the year — Social Security withholding stops, but Medicare continues.

What self-employed workers pay

If you are self-employed, you pay both the employee and employer portions of FICA. That is 12.4% for Social Security (up to the wage cap) and 2.9% for Medicare, totaling 15.3% on your net self-employment income. You also pay the extra 0.9% Medicare tax if your income is high enough.

Self-employed tax is calculated on Schedule SE, which you file with your tax return. You can deduct half of your self-employment tax as an adjustment to income, which reduces your taxable income slightly.

Many self-employed people set aside 15% to 20% of their income for FICA and income taxes combined, because both are due when you file your return in April.

How FICA differs from federal income tax

FICA and federal income tax are two separate withholdings. FICA funds Social Security and Medicare. Federal income tax funds general government operations. Your employer withholds both from your paycheck, but they are calculated differently and go to different places.

FICA is a flat percentage — 7.65% for employees — with no deductions or exemptions. Federal income tax is progressive, meaning the rate depends on your income bracket and filing status. You can also claim deductions and credits that lower your federal tax.

On your pay stub, you will see both listed separately. FICA appears as "Social Security" and "Medicare" or sometimes as "FICA." Federal income tax appears as "Federal Withholding" or "FIT."

Why FICA tax is withheld from every paycheck

FICA tax funds programs you may use later: Social Security retirement benefits, disability benefits if you become unable to work, and Medicare coverage at age 65. The withholding is mandatory for all employees and self-employed people with net earnings of $400 or more per year.

Your FICA contributions are tracked under your Social Security number. When you retire, become disabled, or reach age 65, the Social Security Administration and Medicare use your contribution record to determine your benefit amount. The more you earn and pay in FICA tax, the higher your future benefits.

You cannot opt out of FICA tax. It is a legal requirement for nearly all workers in the United States.

Frequently Asked Questions

Why does my FICA tax stop partway through the year?

Social Security tax has a wage cap — $168,600 in 2024 — so once you earn that much, no more Social Security tax is withheld. Medicare tax continues all year. If you work for multiple employers, each one withholds Social Security tax independently, so you might overpay; you can claim a refund on your tax return.

Is FICA tax the same as payroll tax?

FICA is one type of payroll tax. Payroll tax is the umbrella term for all taxes withheld from your paycheck, including FICA, federal income tax, and state and local taxes. FICA specifically funds Social Security and Medicare.

Do I get FICA tax back on my refund?

No. FICA tax is not refundable. You pay it to fund Social Security and Medicare, and it goes toward your future benefits, not toward a tax refund. Federal income tax can result in a refund if you overpaid, but FICA does not work that way.

What happens to FICA tax if I don't work?

If you have no income, you pay no FICA tax. If you receive unemployment benefits, Social Security, or other government payments, FICA tax is not withheld from those. Only wages and self-employment income trigger FICA tax.

Can I reduce my FICA tax?

No. FICA tax is a fixed percentage with no deductions or exemptions. You cannot lower it by claiming dependents or deductions. The only way to reduce FICA tax is to earn less income, which is not practical for most people.