Quick answer
- What is FICA? The Federal Insurance Contributions Act tax: 6.2% Social Security plus 1.45% Medicare, 7.65% of wages withheld from the employee, and the employer pays a matching 7.65%.
- In 2026 the Social Security part stops at $184,500 of wages (IRS Topic 751). The base rises to $192,300 on January 1, 2027 (Social Security Administration). Medicare has no cap, and an extra 0.9% applies to wages over $200,000.
- On $1,691.00 of taxable wages, FICA is $104.84 Social Security plus $24.52 Medicare, $129.36 in total. With the employer match, $258.72 goes to the IRS for that paycheck.
If you have looked at a pay stub and wondered what is FICA, the short version is this: FICA is the federal payroll tax that funds Social Security and Medicare. In 2026 it takes 7.65% of your wages, split into 6.2% for Social Security and 1.45% for Medicare, and your employer pays the same amount again on top. It is separate from federal income tax, it does not change with your Form W-4, and almost every employee in the United States pays it from the first dollar they earn. The rest of this guide walks through the FICA tax rate for 2026, a worked example from a sample pay stub, the rules for high earners and the self-employed, who is exempt, and the deposit duties that fall on employers.
What is FICA? Two taxes under one name
FICA stands for Federal Insurance Contributions Act, the section of the Internal Revenue Code that authorizes the tax. On a pay stub, "FICA" is shorthand for two separate taxes that are figured on the same wages:
| Tax | Also shown as | Employee | Employer | Total | 2026 wage limit |
|---|---|---|---|---|---|
| Social Security | OASDI, SS, FICA-SS | 6.2% | 6.2% | 12.4% | $184,500 |
| Medicare | HI, MED, FICA-M | 1.45% | 1.45% | 2.9% | None |
| FICA total | 7.65% | 7.65% | 15.3% |
Three things make FICA different from the federal income tax line above it on the stub. First, it is flat: everyone pays the same percentage, whether they earn $12 an hour or $120,000 a year. Second, your Form W-4 has no effect on it; filing status, dependents and extra withholding only change income tax. Third, the employer pays an equal share out of its own pocket, so the true cost of a $20-an-hour employee to the business is at least $21.53 an hour before any benefits.
You will sometimes hear the whole package called "payroll tax" or "Social Security and Medicare tax." Those all mean the same thing. States do not collect FICA, though a few run their own payroll deductions (for example, state disability or paid family leave insurance) that sit near FICA on the stub.
FICA tax rate 2026: limits, and what changes in 2027
The percentages have not moved since 1990, so the figure that changes each year is the Social Security wage base, the amount of wages the 6.2% applies to. The IRS confirms the 2026 figures in Tax Topic 751 and Publication 15; the Social Security Administration sets the base each October for the following year.
| Year | Social Security wage base | Maximum employee Social Security tax (6.2%) | Medicare rate | Additional Medicare Tax |
|---|---|---|---|---|
| 2025 | $176,100 | $10,918.20 | 1.45%, no limit | 0.9% over $200,000 |
| 2026 (current) | $184,500 | $11,439.00 | 1.45%, no limit | 0.9% over $200,000 |
| 2027 (from January 1) | $192,300 | $11,922.60 | 1.45%, no limit | 0.9% over $200,000 |
A few points to pin down:
- The wage base is per employer, per calendar year. Each employer withholds 6.2% until the wages it has paid you reach $184,500, then stops until January 1. If you have two jobs, both employers withhold up to the base and you recover any excess on your tax return.
- The 2027 base of $192,300 was announced by the Social Security Administration in October 2026 alongside the 3.6% cost-of-living adjustment. It rises with the national average wage index, not with inflation, and is always rounded to a multiple of $300. Check ssa.gov before you set up 2027 payroll.
- The $200,000 Additional Medicare Tax threshold is not indexed. It has been $200,000 since the tax started in 2013.
- Household and election workers have their own floors. Publication 15 (2026) says FICA applies to a household worker paid $3,000 or more in cash wages in 2026, and to an election worker paid $2,500 or more.
Worked example: FICA on a real pay stub
Take Emily Carter, a kitchen employee at Northfield Coffee in Austin, Texas, who earns $19.00 an hour and is paid biweekly. For the November 1 to 14 pay period she worked 72 regular hours and 6 overtime hours, used 8 hours of PTO and submitted an $86.00 expense claim, for a gross of $1,777.00. The reimbursement is not wages, so her taxable wages before any benefit deductions are $1,691.00. (Emily's numbers are an illustrative sample, not a real person.)
- Social Security: $1,691.00 × 6.2% = $104.84
- Medicare: $1,691.00 × 1.45% = $24.52
- Employee FICA: $104.84 + $24.52 = $129.36
- Employer match: another $129.36, so Northfield Coffee sends the IRS $258.72 in FICA for this one paycheck.
Now look at the sample stub in our guide to how to read a pay stub. It shows Emily's Social Security wages as $1,646.00, not $1,691.00, with $102.05 of Social Security tax and $23.87 of Medicare. The $45.00 difference is her health insurance premium, which she pays through a Section 125 plan. Because that premium comes out before FICA is figured, her FICA drops from $129.36 to $125.92 and her employer's match drops by the same $3.44. The next section explains why her 401(k) contribution on the same stub did not get the same treatment.
For a plainer case, Maya Torres works the front counter at $17.50 an hour with no benefit deductions. Eighty hours in a pay period is $1,400.00 of wages: $86.80 Social Security, $20.30 Medicare, $107.10 of FICA, and $214.20 to the IRS once the employer match is added. Over a full year of 26 paychecks that is $2,784.60 from Maya and $2,784.60 from the business.
Why Section 125 premiums lower FICA but a 401(k) does not
Not every pre-tax deduction is pre-tax for every tax. This is the detail that produces two different "taxable wages" figures on one stub.
- Section 125 cafeteria plan benefits. Health, dental and vision premiums, health FSA contributions and HSA contributions made by salary reduction through a Section 125 plan are excluded from wages for federal income tax and, per IRS Publication 15, may also be excluded from wages for Social Security, Medicare and FUTA. The IRS treats the benefit as if the employer had paid for it directly, and employer-paid health insurance is not subject to Social Security and Medicare tax. So Emily's $45.00 premium lowers both her income tax wages and her FICA wages.
- Traditional 401(k) and 403(b) deferrals. Publication 15 lists elective deferrals as generally exempt from federal income tax withholding but taxable for Social Security and Medicare. Emily's $67.64 contribution lowers her income tax wages to $1,578.36, but her FICA wages stay at $1,646.00. She earns Social Security credit on that money now, and pays income tax on it when she withdraws it in retirement.
- Roth 401(k) contributions are after-tax for everything, so they change neither figure.
The same split shows up at year end. On Emily's Form W-2, box 1 (federal wages) will be lower than boxes 3 and 5 (Social Security and Medicare wages) by exactly her 401(k) deferrals for the year, while the Section 125 premiums are missing from all three boxes.
FICA over $184,500 and over $200,000
Two thresholds change the math for higher earners, and they work in opposite directions. Social Security tax stops at the wage base. Medicare tax never stops and gets heavier past $200,000.
Here is a $250,000 salary in 2026 for an employee who files as single (illustrative, Social Security and Medicare only):
| Line | Calculation | Employee pays | Employer pays |
|---|---|---|---|
| Social Security | 6.2% × $184,500 (wage base) | $11,439.00 | $11,439.00 |
| Medicare | 1.45% × $250,000 | $3,625.00 | $3,625.00 |
| Additional Medicare Tax | 0.9% × ($250,000 − $200,000) | $450.00 | $0.00 |
| Total | $15,514.00 | $15,064.00 |
Three rules from the IRS Additional Medicare Tax guidance decide how the 0.9% works:
- Employers withhold on wages over $200,000, full stop. The employer must begin withholding the 0.9% in the pay period in which an employee's year-to-date wages pass $200,000, regardless of the employee's filing status or any other income.
- The real threshold depends on filing status. It is $250,000 for married filing jointly, $125,000 for married filing separately and $200,000 for everyone else. A married couple who each earn $150,000 owe the tax on $50,000 even though neither employer withheld it; a single filer with two $120,000 jobs owes it on $40,000 for the same reason. Form 8959 squares this up on the tax return.
- There is no employer match. The 0.9% is the only piece of FICA the business does not pay alongside the employee.
In the paycheck where year-to-date wages cross $184,500, only the slice of wages below the base is taxed for Social Security. Payroll software tracks the running total; if you run payroll on a spreadsheet, this is the calculation most likely to be wrong in December.
Self-employed? You pay both halves
A contractor has no employer to match the 7.65%, so the IRS collects both shares from the same person as self-employment tax: 15.3%, made up of 12.4% Social Security and 2.9% Medicare. The IRS applies it to 92.35% of net earnings from self-employment, which mirrors the fact that employees never pay FICA on their employer's half, and it kicks in once net earnings reach $400 for the year. The 12.4% part stops at the same $184,500 wage base, counting wages and self-employment income together, and the 2.9% has no limit. Half of the tax is deductible when figuring adjusted gross income.
Side by side on $60,000 in 2026, estimates:
| Step | W-2 employee, $60,000 wages | 1099 contractor, $60,000 net profit |
|---|---|---|
| Amount taxed | $60,000.00 | $60,000 × 92.35% = $55,410.00 |
| Social Security | 6.2% = $3,720.00 | 12.4% = $6,870.84 |
| Medicare | 1.45% = $870.00 | 2.9% = $1,606.89 |
| Paid by the worker | $4,590.00 | $8,477.73 |
| Paid by the employer | $4,590.00 | $0.00 |
That $3,887.73 gap is one reason worker classification is policed so closely. Our 1099 vs W-2 guide covers the classification tests and the rest of the tax picture on each side.
What FICA pays for
FICA is earmarked money, not general revenue. The Social Security Administration and the IRS route it to three trust funds:
- Old-Age and Survivors Insurance (OASI): retirement benefits and benefits for the spouses and children of workers who have died. Most of the 12.4% goes here.
- Disability Insurance (DI): benefits for workers who become disabled before retirement age and for their families. The rest of the 12.4% goes here.
- Hospital Insurance (HI): Medicare Part A, which covers inpatient hospital care, skilled nursing care and hospice. All of the 2.9%, plus the 0.9% Additional Medicare Tax, goes here. Medicare Parts B and D are paid for by premiums and general revenue, not by FICA.
Paying in is also how you qualify. Workers earn Social Security credits on covered wages, and the SSA says most people need 40 credits, about ten years of work, to qualify for retirement benefits. In 2026 one credit requires $1,890 of covered earnings, up to four credits a year. The wages reported in box 3 of your W-2 are what the SSA uses to figure your future benefit.
Who is exempt from FICA
Very few people. If you are an employee of a private business, assume you owe it. The main exceptions, from IRS Publication 15, Publication 15-A and the IRS international pages:
- Students working for their own school. Wages paid by a school, college or university to a student who is enrolled and regularly attending classes there, at least half-time, are exempt under Internal Revenue Code section 3121(b)(10). The relationship has to be primarily educational; a full-time career employee who also takes a class does not qualify, and the exemption does not follow the student to an off-campus job.
- Certain nonresident aliens. Nonresident aliens on F-1, J-1, M-1 and Q-1 visas are exempt on wages for work the visa allows, such as on-campus jobs and practical training. The IRS says students in these statuses are generally nonresident aliens for their first five calendar years in the US; once they become resident aliens under the substantial presence test, FICA applies. Spouses and children on F-2, J-2 or M-2 status are not exempt.
- Members of certain religious groups. Members of recognized religious groups that are conscientiously opposed to public or private insurance can apply on Form 4029 for exemption from Social Security and Medicare taxes, and in doing so waive the benefits. Separately, ministers, members of religious orders who have not taken a vow of poverty, and Christian Science practitioners can apply on Form 4361 for exemption from self-employment tax on their ministerial earnings.
- Some state and local government employees. Public employees covered by a qualifying public retirement system that replaces Social Security, and not covered by a Section 218 agreement, do not pay the Social Security part. Almost all of them still pay Medicare: the IRS says state and local employees hired after March 31, 1986 are covered for Medicare unless a specific exclusion applies.
- A child under 18 working for a parent's business. Publication 15 lists wages paid to a child by a parent as exempt from Social Security and Medicare until the child turns 18 (21 for domestic work in the parent's home). This applies to a sole proprietorship or a partnership owned only by the child's parents, not to a corporation.
- Small cash payments. Household workers paid under $3,000 in cash wages in 2026 and election workers paid under $2,500 are outside FICA.
Being exempt from income tax withholding, for example by writing "Exempt" on a W-4, does not exempt anyone from FICA. Employers who think a worker qualifies for one of the exceptions above should confirm it in Publication 15-A or with a tax professional before leaving the tax off a paycheck.
Where FICA shows on your pay stub and W-2
When an employee asks a manager what is FICA, it is usually because of two unfamiliar lines on the stub. On the pay stub, FICA sits in the taxes block, usually as two lines. Common labels are FICA, OASDI, SS or SOC SEC for Social Security and FICA-M, MED or Medicare for Medicare. Some systems show one combined "FICA" line at 7.65%. Each line normally has a current-period amount and a year-to-date amount, and good stubs also show the taxable wages the percentage was applied to. Multiply those wages by 6.2% and 1.45% and the lines should match to the cent, as they do on the pay stub templates we publish.
On Form W-2, the IRS instructions map it like this:
| Box | What it holds | 2026 check |
|---|---|---|
| Box 1 | Federal taxable wages. Excludes 401(k) deferrals and Section 125 premiums. | Lower than box 3 by your 401(k) deferrals |
| Box 3 | Social Security wages. Includes 401(k) deferrals, excludes Section 125 premiums. | Cannot exceed $184,500 (boxes 3 and 7 together) |
| Box 4 | Social Security tax withheld. | 6.2% of box 3, at most $11,439.00 |
| Box 5 | Medicare wages and tips. Same as box 3 with no cap. | Can exceed box 3 for high earners |
| Box 6 | Medicare tax withheld, including any Additional Medicare Tax. | 1.45% of box 5, plus 0.9% of wages over $200,000 |
If box 4 is more than $11,439.00 on a single 2026 W-2, the employer over-withheld and owes you a refund; if your boxes 4 add up to more than that across several employers, you claim the excess on your Form 1040.
A short history of the FICA rate
The Social Security Administration's historical tables show how a small tax became a 15.3% one:
- 1937: the first payroll tax is collected under the Social Security Act of 1935: 1% from the employee and 1% from the employer on the first $3,000 of wages, a maximum of $30 a year each.
- 1966: the Medicare Hospital Insurance tax begins at 0.35% each, after Medicare is created in 1965.
- 1990: the combined employee rate reaches 7.65% (6.2% Social Security plus 1.45% Medicare), where it still sits today.
- 1994: the wage cap on the Medicare portion is repealed under the Omnibus Budget Reconciliation Act of 1993; Social Security keeps its cap.
- 2011 and 2012: the employee Social Security rate is temporarily cut to 4.2% as a payroll tax holiday, then returns to 6.2% in 2013.
- 2013: the 0.9% Additional Medicare Tax on wages over $200,000 takes effect.
The wage base has done the moving. It stayed at $3,000 until 1951 and now adjusts automatically each year with the national average wage: $184,500 in 2026 and $192,300 in 2027.
Employer duties: withhold, match, deposit, report
For a business, FICA is four jobs. The IRS spells them out in Publication 15 and Tax Topic 757.
- Withhold 6.2% and 1.45% from each employee's FICA wages every payday, plus 0.9% once an employee's year-to-date wages pass $200,000.
- Match the 6.2% and 1.45% from company funds. Budget 7.65% on top of every wage dollar, with the Social Security part ending at $184,500 per employee.
- Deposit the withheld FICA, your match and the federal income tax you withheld, together, by electronic funds transfer (EFTPS or your IRS business tax account). Your schedule depends on the lookback period: if you reported $50,000 or less of employment taxes in the 12 months ending the previous June 30, you deposit monthly, by the 15th of the following month. If you reported more, you deposit semiweekly: taxes on Wednesday, Thursday or Friday paydays are due the following Wednesday, and taxes on Saturday through Tuesday paydays are due the following Friday. Accumulate $100,000 or more on any day and the deposit is due the next business day. Very small employers whose quarterly liability is under $2,500 may pay with the return instead.
- Report the totals on Form 941 each quarter, due April 30, July 31, October 31 and January 31 (or annually on Form 944 if the IRS has told you in writing to file it), and give each employee a W-2 by January 31 with boxes 3 to 6 filled in.
Northfield Coffee, a new employer, is a monthly depositor. The FICA from its November 20 and December 4 paydays is due by December 15 and January 15 respectively, together with the federal income tax it withheld. The step-by-step is in our guide to how to process payroll, and the forms a new hire fills out before the first paycheck are in new hire paperwork.
The penalties are steep because withheld FICA is the employee's money held in trust. Publication 15 sets the failure-to-deposit penalty at 2% of the shortfall for deposits 1 to 5 days late, 5% for 6 to 15 days, 10% for 16 or more days, and 15% if the tax is still unpaid more than 10 days after the first IRS notice. On top of that, the trust fund recovery penalty can make owners and managers who control the payroll account personally liable for the full amount of unpaid withheld taxes. Accurate hours from a time clock and a payroll system that figures FICA from those hours remove most of the ways this goes wrong.
Frequently asked questions
What does FICA stand for?
FICA stands for Federal Insurance Contributions Act, the law in the Internal Revenue Code that created the payroll tax funding Social Security and Medicare. On a pay stub, FICA means the two taxes taken out for those programs: 6.2% for Social Security and 1.45% for Medicare, 7.65% in total, which your employer matches.
What is the FICA tax rate for 2026?
For 2026 the employee FICA rate is 7.65%: 6.2% Social Security on wages up to $184,500 and 1.45% Medicare on all wages, according to the IRS. Employers pay a matching 7.65%. Wages over $200,000 in the year are also subject to a 0.9% Additional Medicare Tax that only the employee pays.
Is FICA the same as federal income tax?
No. They are separate taxes on the same pay stub. Federal income tax depends on your Form W-4, filing status and income, and it funds the general federal budget. FICA is a flat 7.65% that funds Social Security and Medicare, and nothing you put on the W-4 changes it. Both are withheld from every paycheck.
Do I get FICA back on my tax return?
Usually not. FICA is not a prepayment of income tax, so there is no refund of it in the normal course. One exception: if you had two or more employers in 2026 and together they withheld more than $11,439 of Social Security tax, you claim the excess as a credit on your Form 1040. A single employer that over-withholds must refund you directly.
Why did my Social Security tax stop but Medicare did not?
Social Security tax applies only up to the annual wage base, $184,500 in 2026. Once your year-to-date wages with that employer pass the base, the 6.2% stops until January 1. Medicare has no wage limit, so the 1.45% continues all year, and an extra 0.9% starts once your wages pass $200,000 in the calendar year.
Do employers pay FICA too?
Yes. Employers pay a matching 6.2% Social Security and 1.45% Medicare on each employee's wages, so the government receives 15.3% in total, 12.4% for Social Security and 2.9% for Medicare. The employer share never shows as a deduction on the pay stub. There is no employer match on the 0.9% Additional Medicare Tax.