Yes. Social Security and Medicare are federal taxes. They are collected under the Federal Insurance Contributions Act (FICA), which is why your pay stub may list them as “FICA,” “OASDI,” or “Med.” But while Social Security and Medicare do count as federal tax, they are not the same thing as the federal income tax withheld from your paycheck. The two sit in separate legal buckets, follow different rules, and fund different things.
What FICA Is and the Current Rates
FICA has two parts. The Social Security portion funds retirement, disability, and survivor benefits. The Medicare portion funds hospital insurance for people 65 and older, along with certain younger people with disabilities or end-stage renal disease.1Social Security Administration. Medicare Information
The Social Security tax rate is 6.2% from you and 6.2% from your employer, for a combined 12.4% of wages. The Medicare rate is 1.45% each side, for 2.9%. Your pay stub shows only your half; your employer pays the matching half separately.2Internal Revenue Service. Topic no. 751, Social Security and Medicare withholding rates
Social Security tax applies only up to an annual wage cap. For 2026, that cap is $184,500. Once your wages pass that figure in a calendar year, the 6.2% stops on additional earnings, and your employer’s match stops too.3Social Security Administration. Contribution and Benefit Base
Medicare has no wage cap. Every dollar of earned income is subject to the 1.45% tax. On top of that, high earners pay an additional 0.9% Medicare surtax on earnings above $200,000 for single filers or $250,000 for married couples filing jointly. Only the employee pays that extra 0.9%; employers do not match it.4Internal Revenue Service. Questions and answers for the Additional Medicare Tax
One tax that often gets confused with Medicare is the 3.8% Net Investment Income Tax. It applies to investment income like dividends, capital gains, and rental income when modified adjusted gross income exceeds $200,000 (single) or $250,000 (married filing jointly). It is not a FICA tax and is not withheld from your paycheck; it is settled on your annual return.5Internal Revenue Service. Net Investment Income Tax
How FICA Is Different From Federal Income Tax
Both are federal taxes. That is where the similarity ends.
The biggest structural difference is where the money goes. FICA revenue is deposited into dedicated trust funds, one for Social Security and one for Medicare. Congress cannot legally redirect those funds to pay for roads, defense, or other general spending. Federal income tax, by contrast, flows into the Treasury’s General Fund and finances everything from national parks to federal courts.
The math is different, too. FICA is a flat percentage up to the Social Security wage base, with that extra Medicare tier for high earners. Federal income tax uses a progressive bracket system where each slice of income is taxed at a higher marginal rate. For 2026, those brackets run from 10% on the first $12,400 of taxable income for a single filer up to 37% on income above $640,600.6Internal Revenue Service. IRS releases tax inflation adjustments for tax year 2026, including amendments from the One, Big, Beautiful Bill
Your control over the two is different as well. Income tax withholding is adjustable through Form W-4, which lets you account for filing status, dependents, and deductions.7Internal Revenue Service. About Form W-4, Employee’s Withholding Certificate FICA withholding is not adjustable. Your employer takes the flat percentages from every paycheck regardless of family size, deductions, or anything you put on a form.
What That Means on Your W-2 and Return
Because FICA and federal income tax are separate taxes, they appear in separate boxes on your W-2 and behave differently at tax time.
Federal income tax withheld shows up in Box 2 and is reconciled against your total tax liability when you file. If too much was withheld, you get a refund; if too little, you owe. Social Security tax withheld appears in Box 4, and Medicare tax withheld in Box 6. These are generally final: as an employee, you cannot deduct your share of FICA on your personal return. The 7.65% you pay in FICA does not reduce your taxable income.
There is one situation where FICA shows up on your return. If you worked for two or more employers in the same year and your combined wages exceeded the Social Security wage base of $184,500, each employer withheld 6.2% independently with no way to know what the other was taking out. When you file, the excess Social Security tax is credited against your income tax or refunded.
If an employer withholds FICA in error, for example on wages that should have been exempt, ask the employer to correct it and reimburse you directly. If the employer will not or cannot, you can file Form 843 with the IRS to claim the refund yourself, attaching a copy of your W-2 and, if possible, a statement from the employer explaining how much they have already repaid.8Internal Revenue Service. Instructions for Form 843
If You Work for Yourself
Self-employed workers still pay Social Security and Medicare taxes, but through a parallel system called the Self-Employment Contributions Act (SECA). Because there is no employer to split the bill, you owe both halves: 12.4% for Social Security and 2.9% for Medicare, totaling 15.3%. The additional 0.9% Medicare surtax applies at the same income thresholds as it does for employees.9Internal Revenue Service. Self-employment tax (Social Security and Medicare taxes)
The 15.3% does not apply to your entire net profit. Your net self-employment earnings are first multiplied by 92.35%, which mirrors the fact that an employee’s wages do not include the employer’s share of FICA.10Internal Revenue Service. Topic no. 554, Self-employment tax The $184,500 Social Security wage base cap applies to this adjusted figure just as it does for employees.3Social Security Administration. Contribution and Benefit Base
Self-employment tax is calculated on Schedule SE and paid through quarterly estimated payments using Form 1040-ES, with the final number reconciled on your annual return.11Internal Revenue Service. Estimated taxes You only owe it if your net earnings reach $400 or more for the year.12Internal Revenue Service. Instructions for Schedule SE (Form 1040) (2025)
One partial offset exists where it does not for employees. You can deduct half of your self-employment tax when calculating adjusted gross income. The deduction goes on Schedule 1 of Form 1040 and lowers your income tax, though it does not reduce the self-employment tax itself.10Internal Revenue Service. Topic no. 554, Self-employment tax
So the answer, whether you are a W-2 employee or self-employed, is the same: Social Security and Medicare are federal taxes. They just are not the federal income tax, and treating them as interchangeable is where filers get into trouble.