FICA Taxes Explained: What Social Security and Medicare Take From Your Paycheck

What Is FICA Tax?

FICA stands for the Federal Insurance Contributions Act. It's the payroll tax that funds two programs:

Social Security — retirement, disability, and survivor benefits
Medicare — health coverage for seniors and disabled Americans

Unlike income tax, FICA is a flat rate on gross wages — no deductions, no brackets.

The FICA Breakdown (2026 Rates)

Tax

Rate

Wage Cap

Social Security	6.2% employee + 6.2% employer	$176,100
Medicare	1.45% employee + 1.45% employer	No cap
Additional Medicare	0.9% employee only	Above $200k (single)

Your total FICA withholding: 7.65% (or 2.35% Medicare above $200k)

The employer also pays 7.65% on your behalf — so the full FICA burden on your labor is 15.3%, but you only see half on your pay stub.

The Social Security Wage Base Cap

In 2026, Social Security tax stops after your wages reach $176,100. If you earn more than this, you won't pay Social Security tax on income above the cap.

Impact: Someone earning $200,000 pays Social Security on only $176,100 = $10,918.20 in Social Security tax. Someone earning $100,000 pays on all of it = $6,200.

Mid-year, when you hit the cap, your take-home pay jumps because Social Security withholding stops. This happens around September–October for $176k+ earners.

Medicare Has No Cap

Medicare's 1.45% applies to every dollar of wages — no ceiling. Plus, income above $200,000 (single) or $250,000 (MFJ) triggers an additional 0.9% Medicare surtax, bringing the total to 2.35% on high wages.

Example for $300,000 single earner:

Medicare on first $200,000: 1.45% = $2,900
Medicare on $100,001–$300,000: 2.35% = $2,350
Total Medicare: $5,250

Can You Reduce FICA Taxes?

Not easily. FICA applies to wages before most pre-tax deductions. A few exceptions:

401(k) contributions — Not exempt from FICA
HSA contributions via payroll — FICA-exempt if employer handles deductions
FSA contributions — Generally FICA-exempt when employer-sponsored
Self-employment — Pay both halves (15.3%), but can deduct the employer half

Why FICA Matters for Your Paycheck

If you earn $75,000:

Social Security: $75,000 × 6.2% = $4,650/year ($179/bi-weekly paycheck)
Medicare: $75,000 × 1.45% = $1,087.50/year ($42/bi-weekly paycheck)
Total FICA: $5,737.50/year — nearly 8% of your gross

This comes out before federal income tax and state tax calculations hit, making it one of the largest deductions on most paychecks.

Frequently Asked Questions

What is FICA tax?

FICA (Federal Insurance Contributions Act) is a payroll tax that funds Social Security and Medicare. Employees pay 6.2% for Social Security and 1.45% for Medicare, totaling 7.65% of gross wages. Employers match this amount.

Does Social Security tax have a cap?

Yes. Social Security tax (6.2%) only applies to the first $176,100 of wages in 2026. Once you hit this cap mid-year, your paychecks get larger because Social Security withholding stops.

What is the Additional Medicare Tax?

High earners pay an extra 0.9% Medicare tax on wages above $200,000 (single) or $250,000 (married filing jointly). This brings their total Medicare rate to 2.35% on income above those thresholds.