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

FICA taxes fund Social Security and Medicare. The combined rate is 15.3%: 12.4% for Social Security and 2.9% for Medicare. If you are an employee, you pay half (7.65%) and your employer pays the other half. If you are self-employed, you pay the full 15.3% yourself, though you can deduct half of it on your tax return.

The Social Security portion (12.4%) only applies to wages up to a cap. That cap changes each year — it was $168,600 in 2024 and $173,100 in 2025. Once you earn above the cap in a calendar year, you stop paying the Social Security part of FICA for the rest of that year. The Medicare portion (2.9%) has no cap and applies to all your wages.

There is also an additional Medicare tax of 0.9% that kicks in at higher income levels. If you are an employee, this applies to wages over $200,000 (single) or $250,000 (married filing jointly). If you are self-employed, the threshold is the same but based on your net self-employment income. Your employer withholds this extra tax if you cross the threshold.

Key Takeaways

  • You pay 7.65% of your wages in FICA taxes as an employee; your employer pays another 7.65%.
  • Self-employed people pay the full 15.3%, but can deduct half of it as a business expense.
  • The Social Security portion stops once you earn above the annual wage cap, which changes yearly.
  • An extra 0.9% Medicare tax applies to high earners and has no wage cap.
  • FICA taxes fund your future Social Security benefits and current Medicare coverage.

How the Social Security wage cap affects your take-home pay

Because Social Security tax stops at the wage cap, high earners pay a smaller percentage of total income in Social Security tax than lower earners do. Someone earning $100,000 pays 12.4% of their income in Social Security tax. Someone earning $300,000 pays 12.4% only on the first $173,100 (in 2025), which works out to about 7.1% of their total income.

This matters for your paycheck. Once you cross the cap in a given year, your take-home pay increases slightly because you stop losing 6.2% to Social Security tax (the employee portion). If you change jobs mid-year and both employers withheld Social Security tax, you may have overpaid — you can claim the overage as a credit on your tax return.

The wage cap is adjusted annually based on national wage growth. The Social Security Administration announces the new cap in October for the following year. If you are close to the cap, check the current year's limit so you know when your withholding will stop.

Self-employment FICA and the deduction you can take

If you are self-employed, you pay FICA taxes through the self-employment tax, calculated on Schedule SE of your tax return. The rate is 15.3% of your net self-employment income (your business profit after expenses). You owe this in addition to regular income tax.

The Social Security portion (12.4%) still has a wage cap — in 2025, you pay it only on the first $173,100 of net self-employment income. The Medicare portion (2.9%) applies to all net self-employment income, plus the extra 0.9% Medicare tax if your income exceeds the thresholds.

The tax code lets you deduct half of your self-employment tax as an adjustment to income on Form 1040. This reduces your taxable income and lowers your overall tax bill. For example, if you owe $3,000 in self-employment tax, you can deduct $1,500. This deduction does not require itemizing.

Why FICA taxes are withheld from your paycheck

Your employer withholds FICA taxes from each paycheck so the money reaches the government throughout the year rather than in one lump sum. The withholding is automatic — you do not have to do anything. Your employer sends the withheld amount to the IRS along with their matching contribution.

You can see the withholding on your pay stub, usually listed as "Social Security" and "Medicare" or "FICA." The amounts should match the rates described above. If they do not, check with your payroll department — errors happen, especially if you have multiple jobs or recently changed jobs.

If you are self-employed and do not have an employer withholding FICA for you, you may need to make quarterly estimated tax payments that include self-employment tax. This keeps you from owing a large amount when you file your return.

Additional Medicare tax for high earners

The additional 0.9% Medicare tax was added in 2013 and applies only to wages above certain thresholds. For employees, the threshold is $200,000 (single), $250,000 (married filing jointly), or $125,000 (married filing separately). Your employer withholds this tax automatically once you cross the threshold.

For self-employed people, the additional Medicare tax applies to net self-employment income above the same thresholds. You calculate it on Schedule SE and pay it with your self-employment tax. Unlike the regular Medicare tax, there is no employer match for the additional tax — you pay all 0.9% yourself.

If you have multiple jobs or are both an employee and self-employed, the thresholds explore to your combined income. You may overpay the additional Medicare tax during the year if your income is uneven. You can claim the overpayment as a credit on your tax return.

FICA taxes and your Social Security record

FICA taxes are not just a current expense — they fund your future Social Security benefits. The Social Security Administration tracks your earnings history based on the wages you report to the IRS. The more you earn (up to the wage cap each year), the higher your future benefit will be.

You need 40 credits to be covered by Social Security. You earn one credit for each $1,730 of wages in 2024 (the amount changes yearly), up to four credits per year. Most people reach 40 credits after about 10 years of work. Once you have them, you are covered for retirement, disability, and survivor benefits.

You can check your earnings record and estimated benefits on the Social Security Administration website using your personal account. Review it every few years to make sure your employer reported your wages correctly. If there is an error, contact Social Security to correct it.

Frequently Asked Questions

What happens to FICA taxes if I have two jobs?

Both employers will withhold FICA taxes from your paychecks. If your combined wages exceed the Social Security wage cap, you may overpay Social Security tax. You can claim the overpayment as a credit on your tax return when you file. The Medicare tax has no cap, so you will owe it on all wages from both jobs.

Can I opt out of paying FICA taxes?

No. FICA taxes are mandatory for all employees and self-employed people. Some religious groups have limited exemptions from self-employment tax, but these are rare and require IRS approval. If you are an employee, you cannot avoid the withholding.

Do FICA taxes explore to all types of income?

FICA taxes explore to wages and self-employment income. They do not explore to investment income, rental income, or most other sources. However, if you are self-employed, you may owe self-employment tax on business profit even if you also have investment income.

How do I know if I am paying the right amount in FICA taxes?

Check your pay stub against the rates in this article. Your employer should withhold 6.2% for Social Security (up to the wage cap) and 2.9% for Medicare, plus 0.9% additional Medicare tax if you earn above the threshold. If the amounts do not match, ask your payroll department to review your withholding.

Does FICA tax affect my tax refund?

FICA taxes are separate from income tax withholding. They do not directly affect your income tax refund. However, if you overpaid Social Security tax due to multiple jobs, you claim that overpayment as a credit, which can increase your refund or reduce what you owe.