FICA wages are the portion of your pay subject to Social Security and Medicare taxes under the Federal Insurance Contributions Act. For 2026, you and your employer each pay 7.65% of those wages, split into 6.2% for Social Security and 1.45% for Medicare.1Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates The Social Security portion applies only to the first $184,500 you earn in the year; Medicare has no cap.2Social Security Administration. Contribution and Benefit Base
What Counts as FICA Wages
Federal law defines the wage base broadly. Nearly everything you receive for work counts, whether in cash or another form.3Office of the Law Revision Counsel. 26 USC 3121 – Definitions Your salary or hourly wages are the obvious starting point, but the definition also sweeps in commissions, performance bonuses, and cash tips totaling $20 or more in a calendar month.
Pay for time you didn’t actively work counts too. Vacation pay, holiday pay, and standard sick leave get the same tax treatment as hours you clocked.
Non-cash compensation can trigger the tax as well. When your employer provides a taxable fringe benefit, the fair market value gets added to your W-2 wages.4Internal Revenue Service. Publication 15-B, Employer’s Tax Guide to Fringe Benefits One example that catches people off guard: employer-provided group term life insurance with coverage above $50,000. The imputed cost of coverage over that threshold is taxed under FICA even though you never see the money.5Internal Revenue Service. Group-Term Life Insurance
Your traditional 401(k) is another one worth pinning down. Pre-tax salary deferrals reduce your federal income tax, but they do not reduce your FICA wages. The full pre-deferral salary is what gets taxed for Social Security and Medicare.6Internal Revenue Service. Are Retirement Plan Contributions Subject to Withholding for FICA, Medicare, or Federal Income Tax
Pay That Is Excluded
Several common benefits sit outside the FICA base. The main exclusions:
- Employer-paid health insurance premiums for a qualified plan.4Internal Revenue Service. Publication 15-B, Employer’s Tax Guide to Fringe Benefits
- Salary reductions you elect through a Section 125 cafeteria plan for health insurance, flexible spending accounts, and similar benefits. Pre-tax HSA contributions run through payroll this way and avoid FICA for the same reason.7Internal Revenue Service. FAQs for Government Entities Regarding Cafeteria Plans
- Employer 401(k) matching contributions. Your own deferrals are taxed; the match is not.6Internal Revenue Service. Are Retirement Plan Contributions Subject to Withholding for FICA, Medicare, or Federal Income Tax
- Employer-provided educational assistance up to $5,250 per year for 2026.8Internal Revenue Service. IRS Updates Frequently Asked Questions About Section 127 Educational Assistance Programs
- Qualified transportation benefits for 2026: up to $340 per month for transit passes and up to $340 per month for qualified parking.4Internal Revenue Service. Publication 15-B, Employer’s Tax Guide to Fringe Benefits
The pattern is worth remembering when you make benefit elections. Employer contributions to health and retirement plans are generally outside FICA, but your own salary deferrals only escape it if they flow through a cafeteria plan or a specifically exempted arrangement.
The 2026 Wage Base and Rates
Only the Social Security half of FICA has an earnings cap. For 2026 that cap is $184,500.2Social Security Administration. Contribution and Benefit Base Once your year-to-date wages hit that figure with a single employer, the 6.2% Social Security withholding stops for the rest of the year. The 1.45% Medicare tax keeps going on every dollar.1Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates
Your employer pays the same 7.65% you do, bringing the combined rate to 15.3%.9Office of the Law Revision Counsel. 26 USC 3111 – Rate of Tax You never see the employer half on your pay stub, but it is a real cost of employing you. The Social Security Administration adjusts the wage base each year based on the national average wage index.2Social Security Administration. Contribution and Benefit Base
The Additional Medicare Tax on High Earners
An extra 0.9% Medicare tax applies to wages above certain filing-status thresholds:10Internal Revenue Service. Topic No. 560, Additional Medicare Tax
- Single or head of household: $200,000
- Married filing jointly: $250,000
- Married filing separately: $125,000
Employers do not match this one. They are, however, required to start withholding the 0.9% once your wages pass $200,000 in a calendar year, regardless of your filing status.11Internal Revenue Service. Questions and Answers for the Additional Medicare Tax If you file jointly and your individual wages are $210,000, your employer withholds the extra 0.9% on $10,000 even though your joint threshold is $250,000. You reconcile the difference on your tax return.
If You Are Self-Employed
With no employer covering the other half, self-employed workers pay both sides through the self-employment tax at a combined 15.3%: 12.4% for Social Security and 2.9% for Medicare.12Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) The same $184,500 Social Security wage base applies, and the Additional Medicare Tax of 0.9% kicks in at the same thresholds.
You calculate the tax on Schedule SE and report it on Form 1040. You can deduct the employer-equivalent portion when figuring your adjusted gross income. That deduction lowers your income tax but does not reduce the self-employment tax itself.12Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes)
Who Is Exempt From FICA
A few categories of workers fall outside FICA entirely.
Students Working at Their School
If you are enrolled and regularly attending classes at a school, college, or university and you work for that same institution, your wages are generally exempt.3Office of the Law Revision Counsel. 26 USC 3121 – Definitions The exemption also covers work for certain affiliated support organizations. It does not apply where the school is a state institution and the student’s work is covered under a separate agreement between the state and Social Security.
Nonresident Alien Students
Nonresident aliens on F-1, J-1, or M-1 visas who have been in the United States for fewer than five calendar years are generally exempt on wages from employment their visa permits, such as on-campus jobs and authorized practical training.13Internal Revenue Service. Foreign Student Liability for Social Security and Medicare Taxes After the five-year mark, once the substantial presence test is met, they typically become liable like any other worker unless the student exception still applies.
Domestic Workers Below the Threshold
If you hire a nanny, housekeeper, or other domestic worker, FICA obligations only start when you pay that worker $3,000 or more in cash wages during 2026.14Social Security Administration. Employment Coverage Thresholds Below that, neither of you owes FICA on the earnings.
Getting Back Overpaid Social Security Tax
If you had two or more employers in 2026 and your combined wages exceeded $184,500, each employer withheld Social Security tax independently up to the cap. Your total withholding can end up above the annual maximum. When it does, you claim the excess as a credit against your income tax on Form 1040.15Internal Revenue Service. Topic No. 608, Excess Social Security and RRTA Tax Withheld
A single employer over-withholding is handled differently. You cannot claim the credit on your return. Ask the employer for a correction first, and if that does not work, file Form 843 to request a refund from the IRS.15Internal Revenue Service. Topic No. 608, Excess Social Security and RRTA Tax Withheld On a joint return, each spouse calculates any excess separately.