FICA tax payable is the amount an employer owes the IRS for Social Security and Medicare, made up of the tax withheld from employee paychecks plus the employer’s own matching share. For 2026, the calculation is straightforward: 6.2% Social Security tax on the first $184,500 of each employee’s wages and 1.45% Medicare tax on every dollar, both withheld from the employee and matched by the employer, for a combined 15.3% until the Social Security cap is reached. Getting the math and the deposit timing right matters because penalties start within days of a missed deadline, and unpaid employee withholdings can be assessed against business owners personally.
How to Calculate the Standard Liability
The Social Security tax rate is 12.4% of covered wages, split evenly between employer and employee at 6.2% each. The Medicare tax rate is 2.9%, split at 1.45% each. Together, the standard FICA rate is 15.3%: 7.65% withheld from the employee and 7.65% paid by the employer.1Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates
For 2026, Social Security tax applies only to the first $184,500 an employee earns during the calendar year. Once cumulative wages hit that ceiling, both the employee’s 6.2% withholding and the employer’s 6.2% match stop for the rest of the year. The cap resets every January 1.2Social Security Administration. Contribution and Benefit Base An employee earning exactly $184,500 or more in 2026 contributes $11,439 to Social Security, and the employer contributes the same amount.
Medicare tax has no wage cap. The 1.45% employee withholding and 1.45% employer match continue on every dollar of wages, no matter how high they run.
Tracking year-to-date wages accurately is essential. Fail to stop Social Security withholding at the $184,500 mark and you’ve over-collected from the employee; stop too early and you’ll owe the IRS the shortfall.
Additional Medicare Withholding Above $200,000
Once an employee’s year-to-date wages cross $200,000, the employer must withhold an extra 0.9% on every additional dollar paid to that employee through the end of the calendar year.3Internal Revenue Service. Questions and Answers for the Additional Medicare Tax This surtax comes entirely from the employee. There is no employer match.1Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates
Employers use the single $200,000 threshold for every employee, regardless of filing status. The employee’s actual Additional Medicare Tax depends on filing status and household income and is reconciled on Form 8959 with their individual return.4Internal Revenue Service. Topic No. 560, Additional Medicare Tax
Which Wages Are Included
FICA reaches more than base salary. Bonuses, commissions, tips reported by employees, severance pay, and the fair market value of noncash compensation (including digital assets paid as wages) all count. Elective deferrals to a 401(k) or SIMPLE plan reduce income tax withholding but remain subject to FICA.5Internal Revenue Service. Publication 525 (2025), Taxable and Nontaxable Income
Household employers follow a separate rule. Pay a household employee $3,000 or more in cash wages during 2026 and all of those wages become subject to Social Security and Medicare taxes. Below that amount, no FICA is owed on household wages.6Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide
When to Deposit FICA Taxes
All federal employment tax deposits must be made electronically, through the Electronic Federal Tax Payment System (EFTPS), the IRS business tax account, Direct Pay for businesses, or a financial institution via ACH credit or same-day wire.7Internal Revenue Service. href=”https://www.irs.gov/businesses/small-businesses-self-employed/depositing-and-reporting-employment-taxes” target=”_blank” rel=”noopener”>Depositing and Reporting Employment Taxes
How often you deposit depends on a lookback period. For 2026 Form 941 filers, the IRS looks at total taxes reported during the four quarters from July 1, 2024, through June 30, 2025.8Internal Revenue Service. Publication 15 (2026), (Circular E), Employer’s Tax Guide
Monthly Schedule
If you reported $50,000 or less in taxes during the lookback period, deposit all accumulated FICA and income tax withholdings from a given month by the 15th of the following month.9Internal Revenue Service. Notice 931 – Deposit Requirements for Employment Taxes
Semiweekly Schedule
If you reported more than $50,000 during the lookback period, the deposit deadline depends on your payday. For paydays that fall on Wednesday, Thursday, or Friday, deposit by the following Wednesday. For paydays that fall on Saturday, Sunday, Monday, or Tuesday, deposit by the following Friday.9Internal Revenue Service. Notice 931 – Deposit Requirements for Employment Taxes
The $100,000 Next-Day Rule
If your accumulated tax liability reaches $100,000 or more on any day, you must deposit the full amount by the next business day, regardless of whether you’re normally on a monthly or semiweekly schedule. Triggering this rule also makes you a semiweekly depositor for the rest of the calendar year and the following calendar year.8Internal Revenue Service. Publication 15 (2026), (Circular E), Employer’s Tax Guide
New Employers
In your first year of business, you have no lookback history, so the IRS treats your prior liability as zero. That makes you a monthly depositor by default unless the $100,000 next-day rule kicks in.10Internal Revenue Service. Topic No. 757, Forms 941 and 944 – Deposit Requirements
How to Report What You Owe
Most employers file Form 941 every quarter to report wages paid, FICA taxes withheld, the employer’s matching share, and any Additional Medicare Tax withheld.11Internal Revenue Service. About Form 941, Employer’s Quarterly Federal Tax Return The smallest employers, those whose total annual liability for Social Security, Medicare, and withheld income taxes is $1,000 or less, may qualify to file Form 944 once a year instead.12Internal Revenue Service. About Form 944, Employer’s Annual Federal Tax Return
Employers must also furnish each employee a Form W-2 and file copies with the Social Security Administration, along with the transmittal Form W-3, by January 31 of the following year.13Internal Revenue Service. IRS Reminds Employers of Jan. 31 Filing Deadline for Wage Statements
What a Late or Missed Payment Costs
Missing a deposit deadline triggers a percentage-based penalty that escalates with time:14Internal Revenue Service. Failure to Deposit Penalty
- 1–5 calendar days late: 2% of the unpaid deposit
- 6–15 calendar days late: 5%
- More than 15 calendar days late: 10%
- More than 10 days after the first IRS notice, or on receipt of an immediate-payment notice: 15%
The tiers replace rather than stack. A deposit 20 days late (with no notice yet) owes 10%, not 2% plus 5% plus 10%. Interest also accrues on any unpaid balance. For the first quarter of 2026, the IRS charges 7% annual interest on underpayments by individuals, compounded daily.15Internal Revenue Service. Interest Rates Remain the Same for the First Quarter of 2026
The Trust Fund Recovery Penalty
This is where FICA compliance turns genuinely dangerous for owners. The employee’s share of Social Security and Medicare tax, plus withheld income tax, is considered “trust fund” money. It belongs to the government the moment it’s withheld from the paycheck. If a responsible person willfully fails to turn it over, the IRS can assess a penalty equal to 100% of the unpaid trust fund taxes against that person individually, not just against the business.16Office of the Law Revision Counsel. 26 USC 6672 – Failure to Collect and Pay Over Tax
A “responsible person” is anyone with the authority or duty to collect and pay over the taxes. That typically includes business owners, officers, and anyone who controls which bills get paid. More than one person at a company can be held liable. The penalty covers only the employee’s withheld share, not the employer’s matching portion, but that alone can be a devastating figure.17Internal Revenue Service. 8.25.1 Trust Fund Recovery Penalty (TFRP) Overview and Authority
If your business is short on cash, the worst move is to “borrow” from withheld payroll taxes to cover other expenses. Owners who do this routinely end up personally owing the IRS six-figure amounts that cannot be discharged in bankruptcy under most circumstances.
Fixing a Withholding Error
Mistakes happen. If you over-withheld or under-withheld FICA taxes, the correction vehicle is Form 941-X, the adjusted version of the quarterly return.18Internal Revenue Service. Correcting Employment Taxes
For underreported taxes, file Form 941-X by the end of the quarter in which you discover the error and pay the additional tax with the correction to stop interest and late-payment penalties from growing. Discover the error in February, and the corrected return is due April 30.19Internal Revenue Service. Instructions for Form 941-X
For overreported taxes, you can choose between an adjustment that reduces the tax you owe on a future return or a formal claim for refund. Either way, the deadline is generally three years from the date the original Form 941 was filed or two years from the date you paid the tax, whichever is later. If you overpaid FICA specifically, the IRS requires written consent from affected employees (or documented reasonable efforts to get it) before you can claim a refund of the employee share.19Internal Revenue Service. Instructions for Form 941-X
If You’re Self-Employed
Sole proprietors, independent contractors, and partners don’t have FICA tax payable in the employer sense. They pay the equivalent through self-employment tax under SECA at the same combined 15.3% rate (12.4% Social Security plus 2.9% Medicare), covering both halves themselves, and the tax only kicks in once net self-employment earnings reach $400 for the year.20Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) The mechanics (the 92.35% adjustment, the half-tax income deduction, Schedule SE, and quarterly estimated payments) apply on the individual return, not through payroll deposits.