What FICA actually is
FICA, the Federal Insurance Contributions Act, is the payroll tax that funds Social Security and Medicare. It's the line on your pay stub that isn't income tax, and unlike income tax it's a flat rate with no deductions and no brackets. Employees pay 7.65% and employers pay a matching 7.65%, so 15.3% total goes to the system on every dollar of covered wages.
| Component | Rate | 2026 limit |
|---|---|---|
| Social Security | 6.2% | Applies to wages up to $184,500 |
| Medicare | 1.45% | No cap, all wages |
| Additional Medicare | +0.9% | Wages above $200,000 single / $250,000 joint |
Your pay stub may label these by their program names instead. OASDI (Old-Age, Survivors, and Disability Insurance) is the 6.2% Social Security piece, and MED or HI is the 1.45% Medicare piece. If your stub shows them as two lines, add them together and you have your FICA for that paycheck.
The wage base is the one thing that changes your rate
Social Security tax stops once your wages pass the annual wage base ($184,500 for 2026). If you earn above that, your effective FICA rate falls for the rest of the year. A high earner's take-home pay quietly increases in the fall. Medicare never stops, and the extra 0.9% surtax kicks in for high earners (note your employer does not match that 0.9%).
Why pre-tax 401(k) doesn't help here
This trips people up constantly: a traditional 401(k) contribution lowers your income tax but not your FICA. That's why your W-2 shows Medicare wages (Box 5) higher than taxable wages (Box 1). Health insurance premiums and HSA contributions made through payroll do escape FICA, which makes them unusually efficient. See how to read your W-2.
Self-employed? You pay both halves
An employee splits FICA with their employer. When you're self-employed you are both, so you pay the full 15.3% yourself as self-employment tax: calculated on 92.35% of net profit, with half deductible above the line. Use the self-employment tax calculator for that version, or compare the two in 1099 vs W-2.
Two jobs? Check for excess Social Security withholding
Here's a refund a lot of people leave on the table. The $184,500 wage base applies per person, but each employer applies it independently. If you worked two jobs and earned $120,000 at each, both withheld 6.2% on their own $120,000, so you paid Social Security tax on $240,000 when only $184,500 was subject to it. The excess isn't lost: you claim it as a credit on your Form 1040, and it comes back as part of your refund. Tax software catches this automatically when both W-2s are entered, but it's worth verifying if you changed jobs mid-year at a high salary. Note there's no equivalent for Medicare, which has no cap.
What FICA buys you
Unlike income tax, FICA is tied to benefits: your Social Security retirement benefit is calculated from your 35 highest-earning years of covered wages, and paying Medicare tax for 40 quarters earns premium-free Part A at 65. It's a tax, but it's also a contribution to your own future benefit, which is why earnings above the wage base neither pay Social Security tax nor increase your eventual benefit.