What Is FICA Tax?

What Is FICA Tax?

If you have ever looked at your paycheck and wondered why money is being taken out for Social Security and Medicare, those deductions are FICA taxes.

FICA stands for the Federal Insurance Contributions Act. FICA taxes are federal payroll taxes that help fund Social Security and Medicare.

For most employees, FICA taxes are automatically deducted from each paycheck. In 2026, the standard employee FICA tax rate is 7.65%—6.2% for Social Security and 1.45% for Medicare.

Your employer generally pays a matching amount.

FICA taxes are separate from federal income taxes, state income taxes, and other deductions that may appear on your paycheck. Understanding the difference can make it easier to understand where your money is going each pay period.

What Does FICA Stand For?

FICA stands for the Federal Insurance Contributions Act.

FICA is the federal law that provides for Social Security and Medicare payroll taxes. The taxes are generally collected from employees through payroll withholding, while employers are responsible for withholding the employee’s share and paying their own share.

FICA consists of two taxes:

• Social Security tax
• Medicare tax

Although these taxes are commonly grouped together as FICA, they do not have exactly the same rules.

How Much Is FICA Tax in 2026?

For most employees, the standard FICA tax rate in 2026 is 7.65% of covered wages.

That includes:

For example, if you earn $1,000 in wages that are fully subject to FICA taxes, your employer would generally withhold:

• $62 for Social Security
• $14.50 for Medicare
• $76.50 total in FICA taxes

Your employer would generally pay another $76.50 in its share.

FICA taxes are separate from federal income tax withholding, so both can be deducted from the same paycheck.

What Is Social Security Tax?

Social Security tax is one part of FICA.

For 2026, the Social Security tax rate is 6.2% for employees and 6.2% for employers.

Social Security tax is subject to an annual wage limit. Once an employee earns wages above that limit during the year, additional wages are generally no longer subject to the 6.2% Social Security tax.

What Is the Social Security Wage Limit for 2026?

The Social Security wage base for 2026 is $184,500.

Generally, an employee pays the 6.2% Social Security tax only on the first $184,500 of covered wages earned during 2026.

The maximum employee Social Security tax for 2026 is therefore $11,439.

Once you reach the wage base, your employer generally stops withholding Social Security tax from additional wages for the remainder of the calendar year.

That does not mean all FICA taxes stop. Medicare tax generally continues.

What Is Medicare Tax?

Medicare tax is the second part of FICA.

For 2026, the standard Medicare tax rate is 1.45% for employees and 1.45% for employers.

Unlike Social Security tax, there is no annual wage limit for the regular Medicare tax.

This means that Medicare tax generally continues to be withheld from covered wages even after you reach the Social Security wage base.

For example, if you earn $250,000 in covered wages during 2026, your employer would generally continue withholding the regular 1.45% Medicare tax on your wages.

What Is the Additional Medicare Tax?

Some higher-income employees may also be subject to the Additional Medicare Tax.

The Additional Medicare Tax is an additional 0.9% tax on Medicare wages above certain thresholds.

The thresholds are:

• $200,000 for single taxpayers, heads of household, and qualifying surviving spouses
• $250,000 for married taxpayers filing jointly
• $125,000 for married taxpayers filing separately

There is an important distinction between when an employer must withhold this tax and when an employee ultimately owes it.

An employer must generally begin withholding the additional 0.9% Medicare tax once an employee’s Medicare wages exceed $200,000 during the calendar year. The employer does not match this additional tax.

An employee’s final Additional Medicare Tax liability is determined when the employee files their federal tax return and depends on the employee’s filing status.

Who Pays FICA Taxes?

Both employees and employers generally pay FICA taxes.

The employee’s portion is withheld directly from the employee’s wages.

The employer separately pays its share.

For standard FICA taxes in 2026:

Employee: 7.65%

Employer: 7.65%

Combined: 15.3%

The 15.3% combined rate does not mean that 15.3% is taken out of your paycheck. The employee’s standard share is generally 7.65%.

Why Is FICA Tax Taken Out of My Paycheck?

FICA taxes help fund Social Security and Medicare.

The Social Security portion helps fund Social Security programs, including retirement, survivors, and disability benefits.

The Medicare portion helps fund Medicare’s hospital insurance program.

FICA taxes are generally required for employees whose wages are subject to Social Security and Medicare taxes. You generally cannot ask your employer to stop withholding FICA taxes simply because you would prefer to receive more money in your paycheck.

Certain workers and situations are subject to special rules or exemptions.

Are FICA Taxes the Same as Federal Income Tax?

No.

FICA taxes and federal income taxes are separate taxes.

FICA taxes consist of Social Security and Medicare taxes.

Federal income tax is a separate tax generally withheld from your paycheck based on federal income tax withholding rules.

As a result, your paycheck may show separate deductions for:

• Social Security
• Medicare
• Federal income tax
• State income tax
• Local taxes
• Other deductions

The exact deductions on a paycheck depend on the employee’s circumstances.

Are FICA Taxes the Same as FUTA?

No.

FICA and FUTA are different federal employment taxes.

FICA covers Social Security and Medicare taxes.

FUTA, or the Federal Unemployment Tax Act, concerns federal unemployment taxes.

FUTA is generally paid by employers and is not normally deducted from an employee’s paycheck.

What Types of Pay Are Subject to FICA Tax?

FICA generally applies to wages paid to employees for services performed for their employers.

Depending on the circumstances, this can include:

• Regular wages
• Salaries
• Bonuses
• Commissions
• Certain vacation payments
• Certain taxable fringe benefits
• Certain tips

However, not every type of payment or benefit is necessarily subject to FICA taxes.

Federal law contains exceptions and special rules for certain types of compensation, benefits, and workers.

If you are unsure whether a particular payment should have been subject to Social Security or Medicare taxes, you may want to ask your employer’s payroll department or consult a qualified tax professional.

Are Bonuses Subject to FICA Tax?

Generally, yes.

Bonuses paid to employees are generally considered wages for Social Security and Medicare tax purposes.

Your employer will generally withhold the applicable employee FICA taxes from a taxable bonus and pay the employer’s share.

A bonus may also be subject to federal income tax withholding, but federal income tax withholding and FICA taxes are calculated under different rules.

Are Tips Subject to FICA Tax?

Generally, yes.

Tips received by employees can be subject to Social Security and Medicare taxes.

Employees who receive tips generally have reporting responsibilities, while employers have withholding and reporting responsibilities for applicable payroll taxes.

If you regularly receive tips, you may therefore see Social Security and Medicare taxes associated with your reported tips.

Where Do I See FICA Taxes on My W-2?

Your Form W-2 reports information about the Social Security and Medicare taxes associated with your wages.

The relevant boxes generally include:

• Box 3: Social Security wages
• Box 4: Social Security tax withheld
• Box 5: Medicare wages and tips
• Box 6: Medicare tax withheld

The amounts reported for Social Security and Medicare may be different.

For example, Social Security wages are subject to the annual Social Security wage base, while Medicare wages generally are not.

An employee who earns more than the Social Security wage base during the year may therefore have a higher amount reported in Box 5 than in Box 3.

What If Too Much FICA Tax Was Taken Out of My Paycheck?

If you believe your employer withheld too much Social Security or Medicare tax, start by reviewing your pay stubs and contacting your employer’s payroll department.

There are several reasons your FICA withholding may look different from what you expected, including:

• You reached the Social Security wage base
• You received a bonus
• You received a taxable fringe benefit
• You received reported tips
• Additional Medicare Tax withholding began
• Your employer made a payroll error

If Social Security or Medicare taxes were withheld from wages that should not have been subject to those taxes, the IRS generally advises employees to first contact their employer to request a correction or refund.

If the employer cannot resolve the issue, additional procedures may apply.

Can My Employer Stop Withholding Social Security Tax?

Your employer generally must stop withholding the employee’s Social Security tax once you reach the annual Social Security wage base.

For 2026, that wage base is $184,500.

However, Medicare tax generally continues because there is no annual wage limit for the regular Medicare tax.

If you earn more than $200,000 during the year, your employer may also be required to withhold the Additional Medicare Tax.

This is why an employee may notice that the Social Security deduction disappears from a paycheck later in the year while the Medicare deduction continues.

Do Self-Employed People Pay FICA Tax?

Self-employed individuals generally do not have an employer withholding FICA taxes from their paychecks.

Instead, they generally pay self-employment tax, which covers Social Security and Medicare taxes.

The self-employment tax rate is generally 15.3%, although the calculation is different from simply multiplying all business income by 15.3%.

Special rules apply to self-employment tax, including rules involving the Social Security wage base and Medicare taxes.

What Should I Do If My FICA Deduction Looks Wrong?

If the FICA deduction on your paycheck does not look right, review your pay stub before assuming that your employer made a mistake.

Check:

• Your gross wages
• Your Social Security withholding
• Your Medicare withholding
• Your year-to-date wages
• Whether you recently received a bonus
• Whether you have reached the Social Security wage base
• Whether Additional Medicare Tax may apply

If the numbers still do not make sense, contact your employer’s payroll or human resources department.

If you believe your employer is incorrectly withholding or reporting payroll taxes and the issue cannot be resolved, you may want to seek advice from a qualified tax professional.

The Bottom Line: What is FICA tax?

FICA tax is the federal payroll tax that pays for Social Security and Medicare.

For most employees in 2026, the employee portion is 7.65% of covered wages—6.2% for Social Security and 1.45% for Medicare. Employers generally pay a matching 7.65%.

The Social Security portion is subject to a $184,500 wage base in 2026, while regular Medicare tax generally continues regardless of how much you earn. Some higher-income employees may also be subject to the Additional Medicare Tax.

If you are trying to understand why your paycheck is smaller than your gross wages, FICA taxes are one of the most important deductions to understand.

Related Articles

If you want to better understand your paycheck, taxes, or other employment-related payments, you may also want to read:

• Small Paycheck: Why Is My Paycheck Smaller Than Expected?
• Unemployment Compensation Explained

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Article: What is FICA tax?