What Is FICA Tax?
The two payroll taxes on every paycheck: what they fund, the rates, the wage cap, and what your employer pays.
FICA is the federal payroll tax: 6.2 percent for Social Security on wages up to the annual wage base ($176,100 for 2025) plus 1.45 percent for Medicare on all wages, for a combined 7.65 percent employee share. Your employer matches it, so the true payroll tax cost is 15.3 percent of wages. It funds Social Security benefits and Medicare.
The two parts
FICA stands for the Federal Insurance Contributions Act, and it has two components. Social Security tax is 6.2 percent of wages up to the annual taxable maximum, called the wage base ($176,100 for 2025, adjusted yearly for wage growth). Medicare tax is 1.45 percent of all wages with no cap. Together they are 7.65 percent on most paychecks.
High earners also face an additional Medicare tax of 0.9 percent on wages above $200,000 ($250,000 for joint filers). Employers do not match that surtax; it falls on the employee only.
What it funds
Social Security tax funds retirement, disability, and survivor benefits. Your lifetime earnings record determines your future benefit, which is why the tax applies per worker rather than per household. Medicare tax funds the hospital insurance program that covers most Americans 65 and older.
Unlike income tax, FICA has no standard deduction, no brackets, and no personal adjustments. It applies from the first dollar of wages, which is why low earners feel it more: it is a flat tax on work.
The employer match
Your employer pays a matching 7.65 percent behind the scenes: 6.2 percent Social Security and 1.45 percent Medicare on your wages. The combined payroll tax wedge is therefore 15.3 percent of wages up to the wage base.
Self-employed workers pay both halves themselves as self-employment tax: 15.3 percent total (12.4 percent Social Security plus 2.9 percent Medicare), though they can deduct the employer-equivalent half from income tax. This is the single biggest tax surprise for new freelancers.
FICA vs income tax
FICA and federal income tax are separate systems that happen to be withheld together. Income tax is progressive, with brackets and deductions; FICA is flat (with the Social Security cap). You can owe FICA while owing zero income tax, and vice versa in edge cases.
The Social Security wage base is the quirk to know: once your year-to-date wages pass it, the 6.2 percent stops for the rest of the year and your paychecks get a visible bump. High earners often notice fatter fall paychecks for exactly this reason.
Skip the arithmetic
See FICA on your own pay with the free paycheck calculator.
FICA questions
What is the FICA tax rate?
For employees, 7.65 percent: 6.2 percent for Social Security on wages up to the annual wage base plus 1.45 percent for Medicare on all wages. Employers pay a matching 7.65 percent. Self-employed workers pay both halves as self-employment tax, 15.3 percent total.
Is there a cap on FICA tax?
Social Security tax stops once your wages for the year reach the taxable maximum ($176,100 for 2025); Medicare tax has no cap. Wages above $200,000 ($250,000 joint) also face an additional 0.9 percent Medicare tax on the employee side.
Do employers pay FICA too?
Yes. Employers pay a matching 7.65 percent: 6.2 percent Social Security and 1.45 percent Medicare on your wages. The total payroll tax wedge on your labor is therefore 15.3 percent, split evenly between worker and employer.