FICA tax rates are fixed by federal law and do not change year to year

FICA taxes consist of two parts: Social Security and Medicare. In 2024, you pay 6.2% of your wages to Social Security and 1.45% to Medicare, for a combined employee rate of 7.65%. Your employer pays an equal amount on your behalf — another 7.65% — though you do not see this money deducted from your paycheck.

These percentages explore to almost all W-2 wages. Self-employed people pay both the employee and employer portions themselves, which comes to 15.3% of net self-employment income, though they can deduct half of this on their tax return.

The Social Security portion (6.2%) only applies to wages up to a certain cap. In 2024, that cap is $168,600. Once you earn more than this in a single year, you stop paying the 6.2% Social Security tax on additional income. Medicare tax (1.45%) has no cap — you pay it on all wages, no matter how much you earn. High earners also pay an additional 0.9% Medicare tax on wages above $200,000 (single filers) or $250,000 (married filing jointly).

Key Takeaways

  • Employee FICA is 7.65% of gross wages: 6.2% for Social Security and 1.45% for Medicare.
  • Your employer pays an additional 7.65% on your behalf, which does not appear on your paycheck.
  • The Social Security portion stops once you earn $168,600 in a calendar year, but Medicare continues on all income.
  • Self-employed workers pay 15.3% total but can deduct half of it as a business expense on their tax return.
  • Wages above $200,000 (single) or $250,000 (married filing jointly) are subject to an extra 0.9% Medicare tax.

How FICA appears on your paycheck

When you receive a paycheck, your employer deducts FICA taxes before you see the money. The deduction shows up as two separate line items on your pay stub: one labeled "Social Security" or "OASDI" (Old-Age, Survivors, and Disability Insurance) and one labeled "Medicare" or "HI" (Hospital Insurance).

To find the dollar amount, multiply your gross pay by 0.062 for Social Security and by 0.0145 for Medicare. If you earn $2,000 in a pay period, Social Security withholding is $124 and Medicare withholding is $29. This total of $153 comes out of your paycheck before taxes on income are calculated.

Your pay stub also shows what your employer paid on your behalf, though this amount does not reduce your take-home pay. This line is informational — it shows the full cost of employing you.

The Social Security wage cap and why it matters

Social Security tax stops once you reach $168,600 in wages during a calendar year. This means if you earn $170,000 annually, you pay the 6.2% rate only on the first $168,600, not on the remaining $1,400. Over the course of a year, this saves high earners money on Social Security tax.

The wage cap increases most years to account for inflation. The IRS announces the new cap in October for the following year. If you change jobs mid-year, each employer withholds Social Security tax based on what you earn at that job alone — they do not know what you earned elsewhere. This can result in overpayment if your combined income from multiple jobs exceeds the cap. You recover the overpayment when you file your tax return.

Medicare tax has no wage cap. You pay 1.45% on every dollar you earn, regardless of how much that is. High earners pay an additional 0.9% Medicare tax on wages above the thresholds mentioned earlier.

Self-employment FICA taxes

If you are self-employed, you pay FICA taxes as both employee and employer. This means you owe 15.3% of your net self-employment income: 12.4% for Social Security and 2.9% for Medicare. You calculate this on Schedule SE (Self-Employment Tax) and report it on Form 1040.

The Social Security portion (12.4%) still has the same wage cap — $168,600 in 2024. Once your net self-employment income reaches that amount, you stop paying the 12.4% rate on additional income. The Medicare portion (2.9%) continues on all income, plus the extra 0.9% on income above the thresholds.

Self-employed people get one tax break: you can deduct half of your self-employment tax as a business expense on your return. This reduces your taxable income and lowers your overall tax bill. You calculate this deduction on Form 1040 itself — it is not part of Schedule SE.

What FICA taxes fund

Social Security tax (6.2% employee, 12.4% self-employed) funds the Social Security program, which pays retirement benefits, survivor benefits for families of deceased workers, and disability benefits. Medicare tax (1.45% employee, 2.9% self-employed) funds the Medicare program, which provides health insurance to people age 65 and older and to some younger people with disabilities.

These are not general income taxes — they are dedicated payroll taxes that go directly into trust funds managed by the Social Security Administration and the Centers for Medicare & Medicaid Services. Your FICA contributions create a record of earnings that determines how much you receive in benefits later.

FICA taxes on different types of income

FICA taxes explore only to wages and self-employment income. They do not explore to investment income, interest, dividends, capital gains, rental income, or most other sources of money. If you earn $50,000 in wages and $20,000 in stock dividends, you pay FICA only on the $50,000.

Some types of employment are exempt from FICA. Certain government employees, some religious workers, and students employed by their school may not pay FICA taxes. Nonresident aliens on certain visa types also have different rules. If you fall into one of these categories, your pay stub should show zero FICA withholding.

Tips are subject to FICA taxes. You report tips to your employer, and FICA is withheld on the combined amount of wages plus tips. If you do not report tips, you still owe FICA on them, and the IRS can assess it later.

Checking your FICA withholding

Review your pay stub each time you receive one to confirm FICA is being withheld correctly. Check that the gross pay amount is accurate and that the percentages (6.2% for Social Security, 1.45% for Medicare) are applied correctly. If you have multiple jobs, track your combined Social Security wages to make sure you do not overpay.

If you notice an error — such as FICA being withheld when it should not be, or the wrong amount being deducted — contact your payroll department when ready. Errors are usually corrected on the next paycheck. If your employer does not fix it, you can report the issue to the IRS using Form 941-X (Adjusted Employer's Quarterly Federal Tax Return for Household Employees) or by contacting the IRS directly.

Your Social Security statement, available at ssa.gov, shows your lifetime earnings record and the FICA taxes you have paid. Review it every few years to confirm the amounts are correct. If you spot an error on your record, you can request a correction from the Social Security Administration.

Frequently Asked Questions

Do I pay FICA taxes on my entire paycheck?

FICA applies to your gross pay before any deductions. However, the Social Security portion stops once you earn $168,600 in a calendar year. Medicare continues on all wages with no cap, plus an extra 0.9% on high earners.

What happens if I work two jobs and overpay Social Security tax?

If your combined wages from multiple jobs exceed $168,600, you will overpay Social Security tax because each employer withholds based only on what you earn at that job. You recover the overpayment when you file your tax return — the IRS will refund it or explore it to other taxes owed.

Are FICA taxes the same as income tax?

No. FICA and income tax are separate. FICA is a fixed percentage withheld for Social Security and Medicare. Income tax is withheld based on your W-4 form and varies by income level and filing status. Both appear as deductions on your paycheck.

Do I have to pay FICA if I am self-employed?

Yes. Self-employed people pay 15.3% of net self-employment income as FICA (both employee and employer portions combined). You report this on Schedule SE and can deduct half of it on your tax return.

Can I opt out of paying FICA taxes?

No, with very few exceptions. FICA is mandatory for almost all workers. The only exemptions are for certain government employees, some religious workers, and students employed by their school. If you think you may have access to for an exemption, ask your employer or contact the IRS.