FICA is the federal payroll tax that funds Social Security and Medicare, and the line on your paystub labeled FICA (or something similar) is your share of that tax. For most employees, it comes to 7.65% of gross wages: 6.2% for Social Security and 1.45% for Medicare. Your employer pays a matching 7.65% separately, out of its own funds.1Office of the Law Revision Counsel. 26 USC 3101 – Rate of Tax
How the Deduction Is Labeled
Your employer may not use the word “FICA” at all. The Social Security portion often appears as OASDI (Old-Age, Survivors, and Disability Insurance), SS, SS Tax, or FICA-SS. The Medicare portion typically shows up as Medicare, MED, HI (Hospital Insurance), or FICA-Med. Some payroll systems combine the two into a single “FICA” line. Others split them. Whatever the labels, look for two deductions that together come out to roughly 7.65% of your gross pay.
You may also see state deductions sitting near the FICA lines. A handful of states run their own disability or paid-leave insurance programs, and those taxes look similar on a stub but are separate from FICA. They fund state programs, not federal ones.
What the Two Pieces Fund
The 6.2% Social Security tax goes to the Old-Age, Survivors, and Disability Insurance program, which pays monthly benefits to retirees, surviving family members, and people with qualifying disabilities. The 1.45% Medicare tax funds the Hospital Insurance trust fund — Medicare Part A — covering inpatient hospital stays, skilled nursing care, and hospice services, mainly for people 65 and older.2Centers for Medicare & Medicaid Services. 2025 Medicare Trustees Report
FICA dollars are separate from your federal income tax. Income tax flows into the general fund; FICA flows only into the Social Security and Medicare trust funds.3U.S. Treasury Fiscal Data. Government Revenue The system is pay-as-you-go: the tax coming out of your check today pays benefits to current retirees, not into a personal account with your name on it.
Your FICA earnings do build toward your own future benefits, though. In 2026, every $1,890 of covered earnings gives you one Social Security credit, up to four credits per year, and most workers need 40 credits (about ten years of work) to qualify for retirement benefits.4Social Security Administration. Social Security Credits
2026 Rates, the Wage Cap, and the Extra Tax for High Earners
Federal law fixes the employee rate at 6.2% for Social Security and 1.45% for Medicare.1Office of the Law Revision Counsel. 26 USC 3101 – Rate of Tax Those percentages apply to your gross wages each pay period.
Social Security has a wage base limit that adjusts each year. In 2026 the cap is $184,500.5Social Security Administration. Contribution and Benefit Base Once your year-to-date earnings hit that number, the 6.2% deduction stops for the rest of the calendar year. Reach the cap exactly, and your Social Security tax for the year tops out at $11,439. Medicare has no cap. The 1.45% comes out of every dollar you earn.
Additional Medicare Tax
An extra 0.9% Medicare tax applies once wages pass certain thresholds:6Internal Revenue Service. Questions and Answers for the Additional Medicare Tax
- Single or head of household: $200,000
- Married filing jointly: $250,000
- Married filing separately: $125,000
Employers must start withholding the extra 0.9% once your wages from that employer pass $200,000, regardless of your filing status. If your household situation puts you above or below that threshold, you’ll reconcile on your annual return. There’s no matching employer share on this piece; it comes entirely from the employee.
Why Your FICA Might Not Equal Exactly 7.65% of Gross
If the math on your paystub doesn’t quite work out, pre-tax deductions are usually the reason. Contributions through a Section 125 cafeteria plan — employer-sponsored health insurance premiums, flexible spending accounts, dependent-care accounts — are generally exempt from FICA, so they reduce the wages FICA is calculated on.7Internal Revenue Service. FAQs for Government Entities Regarding Cafeteria Plans
Traditional 401(k) contributions work differently. They lower your federal income tax, but they don’t lower FICA-taxable wages.8Internal Revenue Service. Are Retirement Plan Contributions Subject to Withholding Defer $500 to a 401(k), and Social Security and Medicare still get taken out of that $500.
Tips are also subject to FICA. If you receive $20 or more in tips in a calendar month from one employer, you have to report the full amount to that employer by the 10th of the following month, and the employer withholds your share.9Internal Revenue Service. Tip Recordkeeping and Reporting Tips you don’t report to your employer aren’t withheld on; you’ll owe the employee share yourself on Form 4137 when you file. Mandatory service charges the employer distributes to you count as wages, not tips, so standard FICA withholding applies automatically.
What Your Employer Pays
Your paystub only shows half the picture. Your employer matches your Social Security and Medicare contributions dollar for dollar — another 6.2% and 1.45% on your wages — for a combined FICA burden of 15.3%.10Office of the Law Revision Counsel. 26 USC 3111 – Rate of Tax That employer share doesn’t come out of your check. The employer’s Social Security match is also subject to the $184,500 wage base, so it stops once your earnings pass the cap.
Who Doesn’t Pay FICA
Most workers can’t opt out, but a few narrow exemptions exist in federal law.
Students enrolled and regularly attending classes at a college or university are generally exempt from FICA on wages earned from that same school.11Office of the Law Revision Counsel. 26 USC 3121 – Definitions It applies only while you’re a student and only for work at the school where you’re enrolled.
A child under 18 who works in a parent’s sole proprietorship, or in a partnership where both partners are the child’s parents, is exempt from Social Security and Medicare taxes. For domestic work in a parent’s private home, the exemption runs until age 21.12Internal Revenue Service. Family Employees It doesn’t apply if the business is incorporated or has non-parent partners.
Members of recognized religious sects that oppose public insurance benefits can apply for exemption using Form 4029, but approval means giving up any future right to Social Security and Medicare benefits.13Internal Revenue Service. About Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits
Foreign students and exchange visitors on F-1, J-1, or M-1 visas are generally exempt from FICA on wages tied to their visa purpose during their first five calendar years in the United States.14Internal Revenue Service. Foreign Student Liability for Social Security and Medicare Taxes After that, or once they become resident aliens, standard withholding applies. Employees of foreign governments or international organizations may also be exempt under applicable treaties.15Internal Revenue Service. Employees of Foreign Governments or International Organizations
Getting Back Too Much Social Security Tax
If you worked for more than one employer during the year and your combined wages went over the $184,500 Social Security cap, you probably paid too much. Each employer withholds only on what it paid you, so neither one knows to stop. You claim the excess as a credit on your federal income tax return.16Internal Revenue Service. Topic No. 608, Excess Social Security and RRTA Tax Withheld Spouses filing jointly each calculate the overpayment separately.
If a single employer over-withheld — because of a payroll error, say — ask the employer to correct it first. If that doesn’t work, you can file Form 843 with the IRS to request a refund, attaching your W-2 and, if you can get it, a statement from the employer about whether it has already reimbursed you or claimed a credit.17Internal Revenue Service. Instructions for Form 843 – Claim for Refund and Request for Abatement