Understanding FICA: If you’ve ever looked at your pay stub and wondered why money is taken out for Social Security and Medicare, you’re seeing FICA taxes.
FICA stands for the Federal Insurance Contributions Act. These payroll taxes help fund Social Security and Medicare programs. For most employees, FICA is automatically deducted from each paycheck, so you may notice it even if you don’t think about it when looking at your take-home pay.
FICA is made up of two main taxes: Social Security tax and Medicare tax. They have different rules, and understanding the difference can make your paycheck easier to understand.
In this guide, we’ll break down how FICA works, how much employees pay in 2026, what employers contribute, when the Social Security tax stops, and how Additional Medicare Tax can affect higher earners.
What Is FICA?
FICA is the federal law that requires employers and employees to contribute to Social Security and Medicare through payroll taxes.
For a typical employee, FICA includes:
- Social Security tax: 6.2% paid by the employee
- Medicare tax: 1.45% paid by the employee
- Total employee FICA: 7.65%
Employers generally pay a matching 7.65% on the employee’s wages. That makes the combined employee and employer rate 15.3%, although the employee sees only their own share deducted from their paycheck.
FICA is separate from federal income tax. Your employer may withhold both from the same paycheck, but they serve different purposes and are calculated differently.
What Does FICA Stand For?
FICA stands for the Federal Insurance Contributions Act.
The tax is divided into two programs:
| FICA Tax | Employee Rate | Employer Rate |
|---|---|---|
| Social Security | 6.2% | 6.2% |
| Medicare | 1.45% | 1.45% |
| Total | 7.65% | 7.65% |
Social Security taxes help fund retirement, survivor, and disability benefits. Medicare taxes help fund Medicare’s hospital insurance program.
How Much Is FICA Tax in 2026?
For 2026, the employee FICA rate is generally 7.65%:
- 6.2% for Social Security
- 1.45% for Medicare
The Social Security wage base for 2026 is $184,500. This means Social Security tax generally applies only to the first $184,500 of covered wages during the year.
Medicare is different. There is no wage base limit for Medicare tax, so covered wages continue to be subject to the regular 1.45% Medicare tax.
A simple example
Suppose you earn $60,000 in wages during 2026.
Your approximate employee FICA would be:
Social Security:
$60,000 × 6.2% = $3,720
Medicare:
$60,000 × 1.45% = $870
Total FICA:
$3,720 + $870 = $4,590
That’s about 7.65% of your covered wages.
This is a simplified example. Your actual paycheck can look different because payroll calculations can involve other types of compensation, deductions, and withholding rules.
What Is Social Security Tax?
Social Security tax is the first part of FICA.
For 2026, employees generally pay 6.2% of covered wages toward Social Security, while employers generally contribute another 6.2%.
Unlike Medicare, Social Security has an annual wage limit.
2026 Social Security wage limit
The maximum amount of earnings subject to Social Security tax in 2026 is $184,500.
For example, an employee earning $100,000 would generally pay Social Security tax on the full $100,000.
An employee earning $250,000 would generally pay Social Security tax only up to the $184,500 wage base.
The maximum employee Social Security tax for 2026 is therefore:
$184,500 × 6.2% = $11,439
The employer generally contributes the same amount.
What Is Medicare Tax?
Medicare tax is the second part of FICA.
Employees generally pay 1.45% of Medicare wages, and employers generally pay another 1.45%. Unlike Social Security, Medicare has no annual wage cap.
That means Medicare tax continues to apply as your wages increase.
For example, if you earn $50,000:
$50,000 × 1.45% = $725
If you earn $200,000:
$200,000 × 1.45% = $2,900
The regular Medicare tax continues beyond $200,000 because there is no wage base limit.
What Is Additional Medicare Tax?
Higher-income employees may also see an Additional Medicare Tax withheld from their paychecks.
The Additional Medicare Tax rate is 0.9% on wages above $200,000. Employers must begin withholding it when an employee’s wages exceed $200,000 during the calendar year, regardless of the employee’s filing status. There is no employer matching portion for this additional 0.9% tax.
The threshold used by the employer for withholding is $200,000. However, the amount you ultimately owe can depend on your filing status and your combined income when you file your federal tax return.
This is one reason why the amount withheld from a paycheck doesn’t always equal the final tax amount reported on a tax return.
FICA vs. Federal Income Tax
FICA and federal income tax are not the same thing.
FICA taxes are generally made up of Social Security and Medicare taxes. For most employees, these taxes are calculated as a percentage of covered wages.
Federal income tax withholding is separate. The amount withheld depends on factors such as your wages, Form W-4 information, filing status, and other applicable withholding rules.
This distinction matters when reading a pay stub.
You might see several separate deductions, including:
- Federal income tax
- Social Security
- Medicare
- State income tax
- Local taxes
- Retirement contributions
- Health insurance premiums
Not every employee has all of these deductions.
How FICA Affects Your Take-Home Pay
FICA reduces your gross pay before you receive your net paycheck.
For example, imagine an employee earns $2,000 in gross wages for a pay period.
A simplified FICA calculation would be:
- Social Security: $124
- Medicare: $29
- Total FICA: $153
That leaves $1,847 before considering federal income tax, state taxes, insurance, retirement contributions, or other deductions.
The actual amount deposited into the employee’s bank account could therefore be considerably lower than $1,847.
This is why your gross pay and take-home pay are different.
Does the Employer Pay FICA Too?
Yes.
For most employees, the employer generally pays a matching share of Social Security and Medicare taxes.
For 2026:
- Employee Social Security: 6.2%
- Employer Social Security: 6.2%
- Employee Medicare: 1.45%
- Employer Medicare: 1.45%
The employer’s contribution does not normally come out of the employee’s take-home pay. It is an additional payroll tax paid by the employer.
How FICA Works for Self-Employed Workers
Self-employed workers generally don’t have an employer paying the matching portion of Social Security and Medicare taxes for them.
Instead, self-employed individuals generally pay self-employment tax, which covers both the employee and employer portions of Social Security and Medicare taxes.
The combined rate is generally 15.3%, although the actual calculation is more complicated than simply multiplying all business income by 15.3%.
Self-employed individuals should also consider deductions and the specific rules used to calculate net earnings from self-employment.
If you’re self-employed, don’t assume the FICA calculation on a regular employee paycheck applies directly to your situation.
Why Did My FICA Deduction Change?
Your FICA deduction can change when your wages change.
For example, your deduction may be higher when:
- You work overtime.
- You receive a bonus.
- Your hourly rate increases.
- You receive additional taxable compensation.
- Your earnings increase enough to reach the Social Security wage base.
Your Social Security withholding can also stop after you reach the annual Social Security wage base for the year, while Medicare withholding generally continues.
This can cause your take-home pay to change during the year even if your regular salary stays the same.
Common FICA Mistakes
Confusing FICA with federal income tax
FICA is not the same as federal income tax. They are separate payroll taxes.
Assuming Medicare has a wage cap
It doesn’t. Medicare has no wage base limit under the regular rules.
Assuming Social Security tax applies to every dollar earned
Social Security has an annual wage base. For 2026, that limit is $184,500.
Forgetting about Additional Medicare Tax
Higher earners may have an additional 0.9% Medicare withholding after wages exceed $200,000 during the year.
Comparing gross pay with net pay
FICA is only one part of the deductions that can reduce your paycheck. Federal and state taxes and voluntary deductions can also affect your final take-home pay.
How to Check FICA on Your Pay Stub
Your pay stub may show Social Security and Medicare separately.
Look for labels such as:
- Social Security
- OASDI
- Medicare
- HI
- FICA
Your year-to-date totals can also help you track how much has been withheld during the year.
For 2026, an employee’s Social Security tax generally cannot exceed $11,439 because of the $184,500 wage base. Medicare does not have the same annual limit.
If something on your pay stub doesn’t look right, compare it with your payroll records and ask your employer’s payroll or HR department for clarification.
FICA Tax Example
Let’s look at a simple annual example.
Suppose an employee earns $75,000 in 2026.
Estimated Social Security tax:
$75,000 × 6.2% = $4,650
Estimated Medicare tax:
$75,000 × 1.45% = $1,087.50
Estimated total employee FICA:
$5,737.50
This example assumes all $75,000 is subject to the standard Social Security and Medicare rates and does not account for special payroll situations.
It also does not include federal income tax, state income tax, retirement contributions, health insurance, or other deductions.
Key Takeaways
- FICA stands for the Federal Insurance Contributions Act.
- FICA includes Social Security and Medicare taxes.
- Employees generally pay 6.2% for Social Security and 1.45% for Medicare.
- The total employee FICA rate is generally 7.65%.
- Employers generally pay a matching 7.65%.
- The 2026 Social Security wage base is $184,500.
- Medicare has no wage base limit.
- Additional Medicare Tax is 0.9% on wages above $200,000 for employer withholding purposes.
- FICA is separate from federal income tax.
- FICA is one of several deductions that can reduce your take-home pay.
Frequently Asked Questions
Is FICA the same as Social Security?
No. Social Security is one part of FICA. Medicare is the other main part.
How much FICA tax does an employee pay?
For most employees in 2026, the employee portion is 7.65% of covered wages: 6.2% Social Security and 1.45% Medicare.
Does my employer pay FICA?
Yes. Employers generally pay a matching 6.2% Social Security tax and 1.45% Medicare tax on covered employee wages.
Does FICA have a wage limit?
Social Security has a wage base limit. For 2026, it is $184,500. Medicare does not have an annual wage base limit.
Why is FICA taken out of my paycheck?
FICA taxes are required payroll taxes that help fund Social Security and Medicare programs.
Can FICA withholding stop?
Social Security withholding can stop after you reach the annual Social Security wage base. Regular Medicare tax generally continues because Medicare has no wage base limit.
What is the Additional Medicare Tax?
It is an additional 0.9% Medicare tax that employers must withhold from an employee’s wages after those wages exceed $200,000 during the calendar year.
Is FICA included in federal income tax?
No. FICA and federal income tax are separate payroll taxes.
Do self-employed people pay FICA?
Self-employed people generally pay self-employment tax, which covers the Social Security and Medicare portions that would otherwise be split between an employee and employer.
How can I estimate FICA on my paycheck?
For a basic employee estimate, multiply covered wages by 6.2% for Social Security and 1.45% for Medicare, while remembering that Social Security has an annual wage base and higher earners may be subject to Additional Medicare Tax.
Final Thoughts
FICA is one of the most common deductions you’ll see on a paycheck, but it doesn’t have to be confusing. Once you understand the difference between Social Security and Medicare, it’s easier to see where part of your gross pay goes and why your take-home pay is lower.
For a quick estimate of how FICA and other payroll taxes may affect your paycheck, use the PaycheckHubs Paycheck Calculator for your state.
Sources
- IRS, Publication 15 (2026), Employer’s Tax Guide
- IRS, Topic No. 751, Social Security and Medicare Withholding Rates
- Social Security Administration, 2026 Social Security Changes
- Social Security Administration, Contribution and Benefit Base
Last reviewed: August 2026
Disclaimer: This article is for general educational purposes and is not tax, legal, or financial advice. Payroll and tax rules can change, and individual circumstances may affect the amount of tax you owe or have withheld.