What is FICA?
FICA stands for the Federal Insurance Contributions Act. It is the payroll tax that funds Social Security and Medicare, and it is the deduction labeled FICA on a US paycheck. It has two parts. The Social Security part, also written OASDI, funds retirement, disability and survivor benefits. The Medicare part, sometimes called FICA-MED or FICA Med tax, funds hospital insurance for older adults and some people with disabilities.
According to the IRS, for 2026 the Social Security tax rate is 6.2% for the employee and 6.2% for the employer, 12.4% in total, applied to wages up to a wage base limit of $184,500. Wages above that limit are not subject to Social Security tax for the year. The Medicare tax rate is 1.45% for the employee and 1.45% for the employer, 2.9% in total, with no wage base limit, so it applies to every dollar of wages.
High earners owe an extra Medicare charge. The Additional Medicare Tax is 0.9% on wages above $200,000 in a calendar year. The employer must start withholding it once wages pass $200,000, whatever the employee's filing status, but the employer does not pay a matching share. This is why an employee's Medicare withholding can be higher than 1.45% late in the year.
The employee half is withheld from each paycheck. The employer half is an additional cost that the employer pays on top of wages and is never taken from the employee. Both halves are deposited with the IRS together with the withheld income tax, reported on Form 941 each quarter, and the employee share appears on the W-2, in Boxes 4 and 6 for Social Security and Medicare tax withheld. Unlike income tax withholding, FICA does not depend on the Form W-4: the employee cannot lower it by claiming a different filing status.
Most wages are subject to FICA, including salary, bonuses and overtime. Some pre-tax benefits, such as certain health plan premiums under a cafeteria plan, reduce the FICA wages, while 401(k) deferrals do not, because they only reduce income tax wages. Self-employed people pay both halves through the self-employment tax.
In practice
An employee earning $5,000 in a pay period has $310 withheld for Social Security (6.2%) and $72.50 for Medicare (1.45%), a FICA total of $382.50. The employer adds a matching $382.50 out of its own funds, so the total sent to the IRS for FICA on that paycheck is $765. Late in the year, once the employee's year-to-date Social Security wages pass $184,500, payroll stops withholding the 6.2% but keeps withholding Medicare. If the same employee's wages pass $200,000, payroll begins withholding the extra 0.9% on the amount above that line. The year's totals are reported on the W-2 and the quarterly Form 941.
Frequently asked questions
What is FICA tax?
FICA tax is the US payroll tax that funds Social Security and Medicare. It is shared between the employee and the employer.
What is the FICA tax rate for 2026?
For 2026 the IRS lists 6.2% for Social Security and 1.45% for Medicare for the employee, with the employer paying the same rates. That is 7.65% each and 15.3% combined.
What is the FICA Social Security wage base in 2026?
The wage base limit is $184,500 for 2026. Wages above that amount are not subject to the 6.2% Social Security tax, although Medicare still applies.
What is FICA Med tax?
It is the Medicare part of FICA. The rate is 1.45% for the employee and 1.45% for the employer, with no wage limit.
What is the Additional Medicare Tax?
It is an extra 0.9% on wages above $200,000 in a calendar year. The employer withholds it from the employee and does not match it.
Can an employee avoid FICA by changing their W-4?
No. FICA is a fixed percentage of wages and does not depend on the Form W-4, which only affects federal income tax withholding.