FICA — the Federal Insurance Contributions Act — funds Social Security and Medicare. For 2026, employees pay 7.65% of wages in FICA: 6.2% Social Security on the first $184,500 of wages and 1.45% Medicare on all wages with no cap (SSA COLA Fact Sheet 2026). Self-employed workers pay 15.3% (both halves) on 92.35% of net earnings. FICA is entirely separate from income tax — it funds specific benefit programs and is withheld whether or not you owe income tax at all.
Use the paycheck calculator to see your exact FICA withholding.
The Two Parts of FICA
| Tax | Rate | Wage Base | 2026 Annual Max (Employee) |
|---|---|---|---|
| Social Security (OASDI) | 6.2% | $184,500 | $11,439 |
| Medicare (HI) | 1.45% | No limit | No limit |
| Total FICA | 7.65% | Up to $184,500 | — |
Above $184,500, Social Security withholding stops but Medicare continues. An Additional Medicare Tax of 0.9% applies on wages above $200,000 (single) or $250,000 (married filing jointly) — see Medicare tax and the Additional Medicare Tax.
Worked Example: Employee at $60,000
A single employee earning $60,000 with no pre-tax deductions:
| Tax | Calculation | Annual | Per Biweekly Paycheck |
|---|---|---|---|
| Social Security | $60,000 × 6.2% | $3,720 | $143.08 |
| Medicare | $60,000 × 1.45% | $870 | $33.46 |
| Total FICA | $4,590 | $176.54 |
Their employer also sends $4,590 in FICA — the employer match — directly to the IRS. This brings the total FICA contribution on this worker to $9,180, without any additional cost to the employee.
FICA Wages vs. Taxable Income
FICA and income tax start from different bases:
| Item | Reduces Income Tax? | Reduces FICA? |
|---|---|---|
| Traditional 401(k) | Yes | No |
| Roth 401(k) | No | No |
| Section 125 health insurance | Yes | Yes |
| Health FSA or HSA (payroll) | Yes | Yes |
| Standard or itemized deduction | Yes | No |
A $4,000 traditional 401(k) contribution lowers your federal taxable wages by $4,000 but has no effect on Social Security or Medicare. A $4,000 pre-tax health plan premium (paid through a Section 125 cafeteria plan) lowers both your taxable wages and your FICA wages.
What FICA Does Not Fund
FICA does not go to federal income tax programs, Medicaid, or general government spending. Social Security taxes (OASDI) specifically fund retirement, disability, and survivor benefits. Medicare taxes (HI) fund Medicare Part A (hospital insurance). Federal income tax is separate and determined by your filing status, deductions, and credits.
Self-Employed Workers: SE Tax Instead of FICA
Self-employed workers — sole proprietors, single-member LLCs, partners — do not have an employer to split FICA. Instead they pay self-employment (SE) tax of 15.3% (12.4% SS + 2.9% Medicare) on 92.35% of net earnings. The 92.35% factor roughly accounts for the employer half that a W-2 employee’s employer pays separately.
Example — $60,000 net profit:
| Step | Calculation | Amount |
|---|---|---|
| Net earnings (92.35%) | $60,000 × 0.9235 | $55,410 |
| SS tax (12.4%) | $55,410 × 12.4% | $6,871 |
| Medicare tax (2.9%) | $55,410 × 2.9% | $1,607 |
| Total SE tax | — | $8,478 |
| Deductible half | $8,478 ÷ 2 | $4,239 |
Compare to the employee at $60,000 who pays $4,590 in FICA. The self-employed person pays $8,478 — nearly double — because they cover both halves. Deducting the half ($4,239) from gross income before calculating income tax partially offsets this. For the full SE tax picture, see self-employment tax explained.
FICA on Supplemental Pay
Bonuses, commissions, overtime, and tips are wages and are all subject to FICA at the standard rates. Withholding methods differ for income tax purposes (the flat 22% supplemental rate applies), but FICA applies uniformly at 7.65% up to the Social Security wage base.
Common FICA Misconceptions
“Once I’m in a higher income tax bracket, FICA goes up.” No — FICA rates are flat and do not depend on your income tax bracket. Only the Additional Medicare Tax adds a rate change, and only above $200,000.
“I can reduce FICA by contributing to a 401(k).” No — traditional 401(k) contributions are excluded from income tax but not from FICA. To reduce FICA wages, use a Section 125 health plan, HSA, or FSA. See HSA and FSA paycheck savings.
“My employer’s match is my money.” The employer FICA match belongs to the federal trust funds — it is not a benefit that accrues directly to you. However, your lifetime Social Security contributions (your half and your employer’s half) do affect your eventual Social Security benefit calculation.
Use the paycheck calculator to see how FICA interacts with your take-home pay. For Social Security specifics, see Social Security tax 2026.