The FICA tax in 2023 takes 7.65% from every employee’s paycheck, and employers match it dollar for dollar. That 7.65% is 6.2% for Social Security, which applies only to the first $160,200 of wages, plus 1.45% for Medicare, which applies to every dollar you earn. Self-employed workers pay both sides for a combined 15.3%. High earners owe an extra 0.9% Medicare surcharge once their wages cross a threshold set by filing status.
The 2023 Rates and How They Split
Your employer withholds two separate taxes from your gross wages each pay period. Social Security is 6.2%, Medicare is 1.45%, and together they make up the 7.65% employee share.1Office of the Law Revision Counsel. 26 USC 3101 – Rate of Tax Your employer pays a matching 6.2% and 1.45% on top of your wages, so the total FICA contribution on your earnings is 15.3%.2Office of the Law Revision Counsel. 26 US Code 3111 – Rate of Tax
These percentages are set by statute and haven’t moved in years. Unlike income tax brackets, they don’t adjust annually. What does change from year to year is the ceiling on Social Security wages.
The $160,200 Social Security Wage Base
Social Security tax applies only up to an annual earnings cap. For 2023, that cap is $160,200.3Social Security Administration. Contribution and Benefit Base Once your cumulative wages for the year hit that number, your employer stops withholding the 6.2% Social Security portion, and your paychecks get a little bigger for the rest of the year.
At the 2023 wage base, the most any employee pays into Social Security is $9,932.40 (6.2% of $160,200). Your employer owes the same amount. Medicare has no such ceiling. The 1.45% applies to every dollar you earn, no matter how high your income goes.3Social Security Administration. Contribution and Benefit Base
If You Work More Than One Job
Each employer withholds Social Security tax independently on the wages it pays you. Neither knows what the other is doing, so your combined withholding can easily exceed the annual maximum. You claim the excess as a credit on your income tax return.4Internal Revenue Service. Topic No. 608, Excess Social Security and RRTA Tax Withheld Your employers don’t get anything back. Each one owed its matching share on the wages it actually paid.
The 0.9% Additional Medicare Tax
On top of the standard 1.45% Medicare rate, a 0.9% Additional Medicare Tax kicks in once your earnings pass a threshold that depends on your filing status:1Office of the Law Revision Counsel. 26 USC 3101 – Rate of Tax
- Single or head of household: $200,000
- Married filing jointly: $250,000
- Married filing separately: $125,000
This surcharge is entirely the employee’s responsibility. Your employer doesn’t match it. Your employer is, however, required to start withholding the extra 0.9% once your wages from that job cross $200,000 in a calendar year, regardless of your filing status.5Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates
That flat $200,000 withholding trigger creates a mismatch for some filers. If you’re married filing jointly and your household income is $260,000 but neither spouse individually earns over $200,000, your employer won’t withhold the extra tax. You’ll still owe it when you file. You reconcile the difference on Form 8959. The form calculates what you actually owe based on your filing-status threshold and compares it to what was withheld. Any shortfall gets added to your tax bill; any overwithholding gets credited back.6Internal Revenue Service. Instructions for Form 8959, Additional Medicare Tax
These thresholds are written into the statute and are not indexed for inflation.7Internal Revenue Service. Questions and Answers for the Additional Medicare Tax They’ve held at the same levels since the tax took effect in 2013, so inflation gradually pulls more earners over the line each year.
Self-Employment Tax in 2023
When you work for yourself, you pay both the employee and employer shares. The combined self-employment tax rate is 15.3%, made up of 12.4% for Social Security and 2.9% for Medicare.8Office of the Law Revision Counsel. 26 USC 1401 – Rate of Tax
One detail trips people up. You don’t pay that rate on your full net profit. The tax applies to 92.35% of your net self-employment earnings.9Internal Revenue Service. Topic No. 554, Self-Employment Tax That adjustment mirrors the fact that traditional employees don’t pay FICA on their employer’s matching share. So if your net self-employment income is $100,000, you calculate the tax on $92,350.
The $160,200 Social Security wage base applies to self-employed income the same way it applies to wages. Only earnings up to that cap, after the 92.35% adjustment, are subject to the 12.4% Social Security portion. The 2.9% Medicare portion applies to all net earnings with no limit, and the 0.9% Additional Medicare Tax applies if your net earnings exceed the filing-status thresholds above.10Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes)
Deducting Half of the Self-Employment Tax
Federal tax law lets you deduct the employer-equivalent portion, meaning half of your self-employment tax, when calculating your adjusted gross income.11Office of the Law Revision Counsel. 26 USC 164 – Taxes It’s an income tax deduction, not a self-employment tax deduction, so it lowers the income you owe income tax on but doesn’t reduce the self-employment tax itself. You calculate the self-employment tax on Schedule SE and report the deductible half on Schedule 1 of Form 1040.12Internal Revenue Service. Schedule 1 (Form 1040) It’s an above-the-line deduction, so you get it whether or not you itemize.
Which Wages Count and Which Don’t
Cash tips count as wages for FICA. If you receive $20 or more in tips during a calendar month from a single employer, you must report them so your employer can withhold the correct FICA amount.13Internal Revenue Service. Tip Recordkeeping and Reporting Tips below $20 in a month from a given employer don’t require reporting, and FICA isn’t withheld on them.
Most taxable fringe benefits your employer provides also count as wages subject to FICA: personal use of a company car, gym memberships, bonuses paid in gift cards. One notable exception is Health Savings Account contributions. Employer HSA contributions, including your own pre-tax salary reductions made through a cafeteria plan, are exempt from FICA. That makes HSA contributions one of the few payroll deductions that actually lower your Social Security and Medicare tax bill. Traditional 401(k) contributions, by contrast, reduce your income tax but stay fully subject to FICA.14Internal Revenue Service. Are Retirement Plan Contributions Subject to Withholding for FICA, Medicare, or Federal Income Tax
Student Workers
If you’re enrolled at least half-time at a college or university and work for that same institution, your wages may be exempt from FICA. The key requirement is that your work is secondary to your education. Graduate teaching and research assistants commonly qualify.15Internal Revenue Service. Student FICA Exception The exemption disappears if you’re eligible for benefits that mark you as a regular employee, such as retirement plan participation, vacation pay, or employer-paid life insurance.
Nonresident Students and Scholars
International students and scholars in F-1 or J-1 status who haven’t become U.S. tax residents are generally exempt from FICA on wages earned through work authorized by their visa. F-1 students get this exemption for the first five calendar years of U.S. presence. J-1 scholars and researchers, as opposed to J-1 students, get a shorter window of two calendar years. Once you pass the substantial presence test and become a tax resident, FICA applies normally. Workers in H-1B, TN, O-1, and similar employment-based visa categories don’t get this exemption at all.
What Changed After 2023
The FICA rates haven’t moved. Employees and employers still each pay 6.2% for Social Security and 1.45% for Medicare. The Social Security wage base has climbed, though. For 2026 it’s $184,500, which pushes the maximum employee Social Security tax to $11,439.00, up from $9,932.40 in 2023.3Social Security Administration. Contribution and Benefit Base If you’re comparing 2023 numbers to a current pay stub, that wage base is where the difference will show up.