The FICA tax is the federal payroll tax that funds Social Security and Medicare. For 2026, employees pay 7.65% of their wages — 6.2% for Social Security and 1.45% for Medicare — and employers match that amount dollar for dollar.1Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates The Social Security portion only applies to the first $184,500 in earnings; Medicare has no cap.2Social Security Administration. Contribution and Benefit Base Self-employed workers pay both halves themselves, and a handful of narrow groups are exempt.
What FICA Funds
FICA revenues go to two programs. The first is Old-Age, Survivors, and Disability Insurance, better known as Social Security, which provides monthly income to retirees, surviving spouses, and people who qualify for disability benefits. The second is Hospital Insurance, or Medicare Part A, which covers inpatient hospital care, skilled nursing, and hospice.3Office of the Law Revision Counsel. 26 U.S.C. Chapter 21 – Federal Insurance Contributions Act Your FICA contributions during your working years earn you credits toward both programs.4Centers for Medicare & Medicaid Services. Original Medicare (Part A and B) Eligibility and Enrollment
2026 FICA Rates and Wage Base
The Social Security tax rate is 6.2% each for employees and employers, for a combined 12.4%. The Medicare tax rate is 1.45% each, for a combined 2.9%. Together, FICA takes 15.3% of every dollar in covered wages, split evenly between worker and employer.1Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates
Only Social Security has a wage base limit. For 2026, that limit is $184,500. Earnings above that amount are not subject to the 6.2% tax.2Social Security Administration. Contribution and Benefit Base Someone earning $220,000 pays Social Security tax on the first $184,500 and nothing on the remaining $35,500. The wage base adjusts annually based on changes in the national average wage index. Medicare has no equivalent cap, so the 1.45% applies to every dollar of wages no matter how much you earn.
Additional Medicare Tax for High Earners
On top of the standard 1.45%, an extra 0.9% Medicare surtax kicks in once your earnings pass a threshold tied to your filing status:5Internal Revenue Service. Topic No. 560, Additional Medicare Tax
- $200,000 for single filers and most other filing statuses
- $250,000 for married couples filing jointly
- $125,000 for married filing separately
Employers begin withholding the additional 0.9% once an employee’s wages pass $200,000 in a calendar year, regardless of filing status.6Office of the Law Revision Counsel. 26 U.S.C. 3101 – Rate of Tax If you file jointly and your combined income comes in below $250,000, you can recoup the extra withholding when you file your return. Unlike standard FICA, employers do not match the Additional Medicare Tax. It falls entirely on the employee.
How the Split Works on Your Paycheck
Federal law divides the financial burden in half. Your employer withholds 6.2% for Social Security and 1.45% for Medicare from each paycheck, then pays a matching amount from its own funds.7Office of the Law Revision Counsel. 26 U.S.C. 3111 – Rate of Tax The employee portion appears on each pay stub, and your employer reports both shares on Form 941 every quarter.8Internal Revenue Service. Instructions for Form 941
One quiet exception affects what counts as wages in the first place. Salary reductions routed through a Section 125 cafeteria plan — the pretax deductions on your pay stub for health insurance premiums, flexible spending accounts, and similar benefits — are generally excluded from FICA-taxable wages.9Internal Revenue Service. FAQs for Government Entities Regarding Cafeteria Plans Group-term life insurance coverage above $50,000 stays subject to FICA even when provided through a cafeteria plan.
If You Work for Yourself
When you work for yourself, there’s no employer to pick up the matching half, so you pay both sides. The Self-Employment Contributions Act imposes a combined rate of 15.3% on net earnings from self-employment: 12.4% for Social Security and 2.9% for Medicare.10Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) You calculate and report it using Schedule SE with your annual return.
A few mechanical details matter. You only owe self-employment tax if your net earnings reach at least $400 for the year. Before applying the 15.3% rate, you multiply your net self-employment earnings by 92.35% (100% minus half of 15.3%). This adjustment mirrors the fact that employees don’t pay FICA on the employer’s share of the tax.11Office of the Law Revision Counsel. 26 U.S.C. 1401 – Rate of Tax The Social Security portion still stops at $184,500 for 2026, and if you also earn wages from a regular job, those wages count first toward the cap.2Social Security Administration. Contribution and Benefit Base
To offset the double burden, you can deduct half of your total self-employment tax when calculating adjusted gross income. This is an above-the-line deduction that reduces your income tax, not your self-employment tax.12GovInfo. 26 U.S.C. 164 – Taxes The Additional Medicare Tax of 0.9% applies to self-employment income above the same filing-status thresholds that apply to wages, and none of that surtax is deductible.5Internal Revenue Service. Topic No. 560, Additional Medicare Tax
Because no one withholds taxes on your behalf, you typically pay through quarterly estimated tax installments. Missing those deadlines can trigger an underpayment penalty even if you’re owed a refund when you file your annual return.13Internal Revenue Service. Estimated Taxes
Working Two Jobs? Watch for Overpayment
If you hold two or more jobs during the year, each employer withholds Social Security tax independently, and neither knows what the other is doing. When your combined wages exceed the $184,500 wage base for 2026, you’ll have overpaid Social Security. You can claim the excess as a refundable credit on your federal tax return.14Internal Revenue Service. Topic No. 608, Excess Social Security and RRTA Tax Withheld You get the money back even if you owe no other tax. One catch: you can only recover the employee share. Each employer correctly paid its match based on the wages it paid, so there’s no employer-side overpayment to reclaim.
Who Is Exempt from FICA
Most workers pay FICA. A few narrow categories don’t.
Students Working for Their School
Students enrolled at and regularly attending a school, college, or university who also work for that institution are exempt from FICA on those wages.15Internal Revenue Service. Student FICA Exception The employment has to be incidental to pursuing a degree. A graduate assistant working in their department qualifies, for example. The exemption covers work for the school itself or for certain affiliated nonprofits that exist exclusively to benefit the school.16Office of the Law Revision Counsel. 26 U.S.C. 3121 – Definitions
Members of Certain Religious Groups
Members of recognized religious groups that conscientiously oppose public insurance can apply for an exemption using Form 4029. The group must have existed continuously since December 31, 1950, must provide for its own dependent members, and must oppose accepting benefits from any private or public insurance covering death, disability, retirement, or medical care.17Internal Revenue Service. Form 4029 – Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits Approval means permanently waiving all Social Security and Medicare benefits.
Nonresident Aliens on Certain Visas
Foreign students temporarily in the U.S. on F-1, J-1, or M-1 visas are generally exempt from FICA for their first five calendar years, as long as the work is allowed by their visa status.18Internal Revenue Service. Foreign Student Liability for Social Security and Medicare Taxes Non-student aliens on J-1 or Q-1 visas, such as researchers, professors, and au pairs, qualify for their first two calendar years.19Internal Revenue Service. Alien Liability for Social Security and Medicare Taxes of Foreign Teachers, Foreign Researchers and Other Foreign Professionals Once these individuals become resident aliens under IRS residency rules, the exemption ends.
Certain State and Local Government Employees
State and local government workers covered by a qualifying public retirement system may be exempt from Social Security tax if their employer isn’t part of a Section 218 Agreement with the Social Security Administration. Since July 1991, government employees who are not members of a qualifying retirement plan and are not covered under a Section 218 Agreement generally must pay full FICA.20Internal Revenue Service. State and Local Government Employees Social Security and Medicare Coverage The rules are specific to each position and employer, and your state’s Social Security Administrator determines which positions are covered.