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

FICA taxes fund Social Security and Medicare. The rate breaks into two parts: Social Security at 6.2% and Medicare at 2.9%. Your employer pays an equal 6.2% and 2.9%, so the total cost to fund these programs is 15.3% of your gross wages. You see half of that (7.65%) withheld from your paycheck; your employer pays the other half directly to the government.

If you are self-employed, you pay both halves yourself — 15.3% total — though you can deduct half of what you pay as a business expense on your tax return. The rate has been fixed at these percentages since 1990 for Social Security and since 1966 for Medicare, though Congress can change them by law.

Key Takeaways

  • You pay 6.2% for Social Security and 2.9% for Medicare from each paycheck, totaling 7.65%.
  • Your employer matches your 7.65%, bringing the total FICA cost to 15.3% of your wages.
  • Self-employed workers pay the full 15.3% but can deduct half of it on their tax return.
  • Social Security tax stops once you reach the annual wage cap, which changes each year; Medicare tax does not have a cap.
  • Additional Medicare tax of 0.9% applies to wages above $200,000 (single) or $250,000 (married filing jointly).

How the Social Security wage cap affects what you owe

Social Security tax only applies to the first portion of your annual wages. In 2024, that cap is $168,600 — meaning once you earn that much in a calendar year, no more Social Security tax is withheld from your remaining paychecks. The cap rises each year based on average wage growth in the economy, so it will be different in 2025 and beyond.

This matters most if you change jobs mid-year or have multiple employers. If you worked two jobs and each employer withheld Social Security tax on $100,000 of wages, you would have paid 6.2% on $200,000 total — $12,400 — even though the cap was lower. You can claim the overpayment as a credit on your tax return, but you have to file to get it back; the IRS does not automatically refund it.

Medicare tax has no wage cap. You pay 2.9% on every dollar you earn, no matter how much you make in a year.

Additional Medicare tax on high earners

If your wages exceed $200,000 (single filers), $250,000 (married filing jointly), or $125,000 (married filing separately), you owe an additional 0.9% Medicare tax on the amount above the threshold. This is withheld from your paycheck like regular FICA tax, but it funds Medicare differently and has no wage cap.

The threshold is based on your filing status and does not adjust for inflation, so more workers hit it each year as wages rise. If you have multiple jobs or are self-employed, you may owe this tax even if no single employer withheld it. You settle the balance when you file your return.

What self-employed workers pay differently

If you are self-employed, you pay both the employee and employer share of FICA — 15.3% total on your net self-employment income. You calculate this on Schedule SE, which is part of your tax return. The Social Security portion (12.4% combined) still stops at the annual wage cap; the Medicare portion (2.9%) continues on all income.

The tax code lets you deduct half of your self-employment tax as an above-the-line deduction, which lowers your taxable income. This partially offsets the fact that you pay both halves, but it does not eliminate the burden — you still owe the full amount to Social Security and Medicare.

Quarterly estimated tax payments are usually required if you expect to owe $1,000 or more in federal income tax and self-employment tax combined. FICA is part of that calculation, so self-employed workers often need to set aside money throughout the year rather than paying it all at tax time.

How FICA withholding appears on your pay stub

Your pay stub shows FICA taxes in two lines: one for Social Security (labeled "FICA-SS" or "Social Security") and one for Medicare (labeled "FICA-Med" or "Medicare"). Each line shows the percentage withheld and the dollar amount. If you earn over the high-income thresholds, a third line appears for Additional Medicare Tax.

The withholding is automatic — your employer calculates it based on your gross pay and your W-4 form. You cannot opt out of FICA taxes. If you think your withholding is wrong, check your W-4 to make sure your employer has the right information about your filing status and dependents, though FICA withholding does not change based on those factors the way income tax withholding does.

Why the rate matters for your retirement and benefits

The FICA taxes you pay now determine your future Social Security and Medicare benefits. Social Security calculates your benefit based on your highest 35 years of earnings, so the amount you pay in FICA tax directly affects the monthly check you receive at retirement. Medicare Part A (hospital insurance) is funded entirely by the Medicare portion of FICA; if you have not paid enough FICA tax over your lifetime, you may have to pay a premium for Part A coverage.

Understanding the rate helps you plan for retirement. If you are self-employed or have variable income, knowing that 15.3% of your net earnings go to FICA lets you budget for quarterly estimated tax payments and understand how much of your income is committed to these programs before you see it in your bank account.

Frequently Asked Questions

Does FICA tax explore to all types of income?

FICA tax applies to wages and self-employment income. It does not explore to investment income, rental income, or most other sources. However, certain types of compensation — like tips, bonuses, and commissions — are subject to FICA tax just like regular wages.

Can I reduce my FICA tax by contributing to a 401(k)?

No. FICA tax is calculated on your gross wages before any 401(k) contributions. Traditional 401(k) contributions reduce your federal income tax but not your FICA tax. This is one reason your paycheck shows both FICA and income tax withheld separately.

What happens if I overpay Social Security tax?

If you had multiple jobs or changed employers and paid Social Security tax on more than the annual wage cap, you can claim the overpayment as a credit on your tax return. The IRS will refund it or explore it to other taxes you owe. You must file a return to recover the overpayment.

Is FICA tax the same as income tax?

No. FICA tax funds Social Security and Medicare and is withheld separately from federal income tax. FICA is a fixed percentage with a wage cap (for Social Security); income tax varies based on your tax bracket and withholding choices. Both appear on your pay stub as separate line items.

Do independent contractors pay FICA tax?

Yes, but they pay it as self-employment tax on Schedule SE rather than having it withheld by an employer. The rate is 15.3% on net self-employment income, and they can deduct half of it on their return. They must usually make quarterly estimated tax payments.