The 2024 FICA tax rate is 15.3% of your wages, split between you and your employer

FICA consists of two separate taxes: Social Security at 6.2% and Medicare at 2.9%. If you are an employee, you pay half (7.65%) and your employer pays the other half. If you are self-employed, you pay both halves yourself (15.3%), though you can deduct half of it on your tax return.

The Social Security portion only applies to wages up to a certain limit each year. In 2024, that limit is $168,600. Once your wages exceed that amount, Social Security tax stops being withheld from your paychecks. Medicare tax, by contrast, has no wage cap — it applies to every dollar you earn, no matter how much.

For high earners, there is an additional 0.9% Medicare tax that kicks in above $200,000 of wages for single filers (or $250,000 for married couples filing jointly). This extra tax is withheld by your employer and does not have a matching employer contribution.

Key Takeaways

  • Social Security tax is 6.2% on wages up to $168,600 in 2024; Medicare tax is 2.9% on all wages with no limit.
  • Employees pay 7.65% total FICA; employers pay a matching 7.65%, making the combined rate 15.3%.
  • Self-employed workers pay the full 15.3% but can deduct half of it as a business expense on their tax return.
  • An additional 0.9% Medicare tax applies to wages above $200,000 (single) or $250,000 (married filing jointly) with no employer match.
  • The Social Security wage base of $168,600 changes each year based on wage growth; the Medicare wage cap does not change.

How the Social Security wage base works in 2024

The Social Security wage base is the maximum amount of your annual earnings subject to the Social Security tax. In 2024, that number is $168,600. This means if you earn $168,600 or less, all of your wages are taxed at 6.2%. If you earn $200,000, only the first $168,600 is subject to Social Security tax.

This wage base changes every year. The Social Security Administration adjusts it in October based on the average wage index for the prior year. If wages across the economy grew, the base goes up. If they stayed flat or declined, it stays the same. The 2024 base of $168,600 was higher than 2023's $160,200, reflecting wage growth in 2022.

The reason for this cap is historical: Social Security was designed as an insurance program where benefits are tied to your earnings record. Higher earners receive higher benefits, but the benefit formula is progressive — it replaces a smaller percentage of income for high earners than for low earners. The wage base reflects this design choice.

Medicare tax has no wage limit in 2024

Unlike Social Security, Medicare tax applies to every dollar of your wages, regardless of how much you earn. The base rate is 2.9% for all employees and employers. There is no cutoff point where Medicare tax stops being withheld.

For employees earning above $200,000 (or $250,000 if married filing jointly), an additional 0.9% Medicare tax is withheld. This extra tax was added in 2013 as part of the Affordable Care Act. It applies only to the employee's portion — your employer does not pay a matching share of this additional tax. If you have multiple jobs or a spouse who also works, the thresholds explore to your combined household income, which can make the tax explore at a lower individual income level than you might expect.

Self-employed FICA in 2024

If you are self-employed, you pay FICA through self-employment tax rather than having it withheld from a paycheck. The rate is 15.3% — the full employee and employer portions combined. You calculate it on your net business income (revenue minus business expenses) using Schedule SE, which you file with your Form 1040.

The Social Security portion (12.4%) still only applies to net income up to $168,600 in 2024. The Medicare portion (2.9%) applies to all net income, plus the additional 0.9% Medicare tax applies to income above the thresholds mentioned above. Self-employed workers can deduct half of their self-employment tax as an adjustment to income on their tax return, which reduces their taxable income.

Many self-employed people underestimate their FICA obligation because they think of it as a percentage of gross revenue. It is actually a percentage of net profit after business expenses. If you have high expenses relative to revenue, your self-employment tax will be lower than someone with the same gross income but lower expenses.

How FICA differs from federal income tax withholding

FICA and federal income tax are two separate withholdings on your paycheck. FICA funds Social Security and Medicare — specific programs with specific benefit formulas. Federal income tax funds the general operations of the federal government and is not tied to any particular program.

The rates are different, the wage bases are different, and the rules are different. Your employer withholds federal income tax based on the W-4 form you complete, which lets you adjust how much is taken out. FICA withholding is automatic and non-negotiable — there is no form to change it. You cannot opt out of FICA, even if you do not plan to use Social Security or Medicare.

On your pay stub, you will see these as separate line items. FICA appears as "Social Security" and "Medicare" (or "OASDI" and "HI"). Federal income tax appears as "Federal Withholding" or "FIT". State and local income taxes, if your state or locality has them, are additional separate withholdings.

What happens if you change jobs or earn over the wage base

If you work for multiple employers in 2024 and your combined wages exceed $168,600, you may overpay Social Security tax. Each employer withholds 6.2% on all your wages up to $168,600, so if you earn $100,000 at Job A and $100,000 at Job B, each employer withholds Social Security tax on the full $100,000, even though your total is $200,000.

When this happens, you have overpaid Social Security tax. You can claim a credit for the overpayment on your Form 1040 when you file your tax return. The IRS will refund the excess. This is one of the few situations where FICA creates a tax refund rather than just funding the program.

The additional 0.9% Medicare tax works differently. If you have multiple employers and your combined wages exceed the threshold, you may not have enough withheld by your employers. In that case, you owe the additional tax when you file your return. Some employers coordinate this, but many do not, so it is worth tracking your total wages across all jobs if you are near the threshold.

How FICA rates and wage bases change year to year

The Social Security wage base changes annually, but the tax rates (6.2% employee, 6.2% employer) do not. The wage base is adjusted each October based on wage growth data from the prior year. The Medicare tax rate (2.9% base, plus 0.9% additional for high earners) has remained the same since 2013.

Congress can change FICA rates or the wage base through legislation, but this is rare. The last time the Social Security tax rate changed was 1983. The wage base, by contrast, is adjusted automatically every year, so it tends to rise over time as wages in the economy grow.

If you are planning your taxes or your budget, it is worth checking the current year's wage base and thresholds at the start of the year. The Social Security Administration publishes these figures in September for the following year, and the IRS publishes them in the Federal Register. Many payroll software systems and tax software update automatically, but manual verification is always a good idea.

Frequently Asked Questions

Why does Social Security tax stop at $168,600 but Medicare does not?

Social Security was designed as an earned-benefit program where your contributions determine your benefit amount. The wage base reflects a policy choice to cap the maximum benefit. Medicare is structured differently — it is more of a universal program, so there is no cap on the tax.

Do I pay FICA on tips, bonuses, and other income?

Yes. FICA applies to all wages and compensation, including tips, bonuses, commissions, and certain fringe benefits. The only common exception is employer-provided health insurance premiums, which are exempt from FICA. If you are unsure whether a specific type of income is subject to FICA, check with your employer or a tax professional.

What if I am a contractor or 1099 worker?

Contractors pay self-employment tax instead of FICA withholding. The rate is 15.3% on net profit, with the same wage base limits as employees. You calculate it on Schedule SE and pay it when you file your tax return, or through quarterly estimated tax payments if you expect to owe more than $1,000.

Can I deduct FICA from my taxes?

Employees cannot deduct FICA from their federal income tax. It is withheld automatically and is not a deductible expense. Self-employed workers can deduct half of their self-employment tax as an adjustment to income, which reduces taxable income but is not a full deduction of the tax itself.

What if my employer did not withhold FICA correctly?

Check your pay stubs and your Form W-2 at the end of the year. If the amounts are wrong, contact your employer's payroll department first — it is usually a processing error. If your employer refuses to correct it or goes out of business, you can file a Form SS-8 with the IRS to dispute the classification, or contact the Social Security Administration directly about your earnings record.