The FICA tax rate is 7.65% for employees and a matching 7.65% for employers, which combines to 15.3% on each worker’s covered wages. That 7.65% is made up of 6.2% for Social Security and 1.45% for Medicare. Self-employed workers pay both halves themselves, for a full 15.3%. High earners owe an extra 0.9% Medicare surcharge above certain income thresholds, and the 6.2% Social Security piece only applies to the first $184,500 of wages in 2026.
What Comes Out of Your Paycheck
Every W-2 paycheck has two FICA lines withheld before you see the money. The first is 6.2% for Social Security, which funds retirement, survivor, and disability benefits. The second is 1.45% for Medicare, which funds hospital insurance.1Office of the Law Revision Counsel. 26 USC 3101 – Rate of Tax Together, that’s 7.65% of your gross wages.
Your employer pays the same percentages on top of your salary. For every dollar of wages subject to FICA, the employer sends a matching 6.2% for Social Security and 1.45% for Medicare to the IRS.2Office of the Law Revision Counsel. 26 USC 3111 – Rate of Tax The employer’s share never shows up on your pay stub, but it’s a real cost of employing you, and the combined contribution per worker is 15.3% of covered wages.
The 2026 Social Security Wage Cap
The 6.2% Social Security portion doesn’t apply to every dollar you earn. It stops at a cap called the contribution and benefit base, which for 2026 is $184,500.3Social Security Administration. Contribution and Benefit Base Once your cumulative wages for the year hit that number, your employer stops withholding Social Security. Any earnings above the cap are only subject to the 1.45% Medicare tax, plus the Additional Medicare Tax if it applies.
The Social Security Administration adjusts the cap each year based on the national average wage index.3Social Security Administration. Contribution and Benefit Base It was $176,100 in 2025 and $168,600 in 2024. The maximum Social Security tax an employee can pay in 2026 is $11,439, which is 6.2% of $184,500. Your employer pays the same maximum.
If you work two jobs, each employer withholds independently against its own $184,500 ceiling. That means you can overpay Social Security tax if your combined wages exceed the cap. You claim the excess back when you file your return.
Additional Medicare Tax for High Earners
On top of the standard 1.45% Medicare tax, a 0.9% Additional Medicare Tax kicks in once your earnings pass a threshold that depends on how you file: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
Above those amounts, your effective Medicare rate becomes 2.35%. Unlike the rest of FICA, the 0.9% surcharge is entirely the employee’s responsibility. Your employer does not match it.
Employers must start withholding the Additional Medicare Tax once your wages from that single job exceed $200,000 in a calendar year, no matter your filing status.4Internal Revenue Service. Topic No. 560, Additional Medicare Tax That creates mismatches. If you’re married filing jointly and earn $190,000 individually, your employer won’t withhold the surcharge, but you may still owe it if you and your spouse together clear $250,000. Going the other way, someone married filing separately owes the tax starting at $125,000, even though the employer isn’t required to start withholding until $200,000. Either way, you settle up on your annual return, and if your employer fails to withhold, you’re still on the hook.5Office of the Law Revision Counsel. 26 USC 3102 – Deduction of Tax from Wages
Self-Employment Rate
If you work for yourself as a freelancer, sole proprietor, or independent contractor, you pay both sides of FICA. The self-employment tax rate is 15.3%, split into 12.4% for Social Security and 2.9% for Medicare.6Office of the Law Revision Counsel. 26 USC 1401 – Rate of Tax The same $184,500 Social Security wage base applies, so the 12.4% only touches earnings up to that cap. The 2.9% Medicare portion hits all net earnings, and the extra 0.9% surcharge kicks in above the thresholds listed above.
You don’t apply 15.3% to your full net profit. First you multiply your net self-employment earnings by 92.35% to get your taxable base.7Internal Revenue Service. Topic No. 554, Self-Employment Tax That adjustment mirrors the fact that W-2 employees aren’t taxed on the employer’s share of their payroll tax. If your Schedule C shows $100,000 in net profit, self-employment tax is calculated on $92,350.
You can also deduct half of your self-employment tax when figuring your adjusted gross income on Form 1040.8Office of the Law Revision Counsel. 26 US Code 164 – Taxes The deduction reduces your income tax, not the self-employment tax itself, and it doesn’t cover the Additional Medicare Tax.9Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) Self-employed workers also pay their FICA through quarterly estimated tax payments rather than paycheck withholding.10Internal Revenue Service. 2026 Form 1040-ES
What FICA Doesn’t Apply To
FICA only applies to earned income from work. Investment income like dividends, interest, capital gains, and rental income sits outside FICA entirely. So do pension payments, annuity distributions, and most government benefits, including Social Security itself. If your income comes from a brokerage account rather than a paycheck, FICA doesn’t touch it.
Some earned income is also carved out. Students who work for the college or university where they’re enrolled and regularly attending classes are generally exempt from FICA on that pay, as long as the work is tied to their studies rather than a career position.11Internal Revenue Service. Student FICA Exception The exemption doesn’t apply if the student qualifies for standard employer benefits like a retirement plan, paid vacation, or sick leave.
Pre-tax contributions through a qualifying cafeteria plan reduce the wages subject to FICA. When you pay health insurance premiums, contribute to a health savings account, or fund a flexible spending account through payroll deduction under a qualifying plan, those amounts come out before FICA is calculated. For 2026, the health FSA contribution limit is $3,400. It’s one of the few direct ways a W-2 employee can shrink the FICA base.
If You Pay Someone to Work in Your Home
Hiring a nanny, housekeeper, home health aide, or other in-home worker can make you a household employer for FICA purposes. The trigger for 2026 is paying any single household employee $3,000 or more in cash wages during the calendar year.12Internal Revenue Service. Employment Taxes for Household Employees Once you cross that threshold, you owe the full employer share of 7.65% and must withhold the employee’s 7.65% from their pay. A weekend babysitter doesn’t get you there; a regular caregiver at $300 per week clears $3,000 before mid-March. Household employers report and pay these taxes annually on Schedule H attached to Form 1040.