What Is SSR Tax? Rates, Wage Cap, and Exemptions

Social Security and Medicare tax is a federal payroll tax that funds retirement, disability, and hospital insurance benefits. If you’re an employee, 6.2% of your wages goes to Social Security and 1.45% goes to Medicare, for a total of 7.65% withheld from each paycheck. Your employer pays a matching 7.65%, bringing the combined rate to 15.3%. Self-employed workers pay the full 15.3% themselves. These rates are set by federal law and haven’t changed since 1990.¹

How the Rates Split Between You and Your Employer

If you earn a W-2 paycheck, you and your employer each pay into two programs under the Federal Insurance Contributions Act, commonly called FICA:

Social Security (OASDI): 6.2% from your wages, plus 6.2% from your employer, totaling 12.4%.
Medicare (Hospital Insurance): 1.45% from your wages, plus 1.45% from your employer, totaling 2.9%.

Your 7.65% share shows up as a line on your pay stub. Your employer deposits the other 7.65% directly with the IRS on your behalf, so you never see that half move.¹

Where the Social Security Tax Stops

Social Security tax only applies up to an annual earnings cap. For 2026, that cap is $184,500.² Once your wages for the year pass that amount, neither you nor your employer owes the 6.2% Social Security tax on the excess. The cap was $176,100 in 2025, and it adjusts each year based on changes in the national average wage index.

Medicare tax works differently. The 1.45% applies to every dollar you earn, with no cap at all.¹

The Extra 0.9% Medicare Tax for Higher Earners

On top of the standard 1.45%, high earners pay an Additional Medicare Tax of 0.9%. The surtax kicks in once your earnings pass a threshold set by your filing status:³

Single, head of household, or qualifying surviving spouse: $200,000
Married filing jointly: $250,000
Married filing separately: $125,000

The married-filing-separately threshold catches people off guard. If you and your spouse each earn $130,000 and file separately, you’d both owe the surtax on $5,000 of income, even though neither of you would owe it filing jointly.

Your employer must start withholding the 0.9% once your wages pass $200,000 in a calendar year, regardless of your filing status. So the withholding trigger is always $200,000, even if your actual threshold is $250,000 because you file jointly. You reconcile the difference on your tax return. Employers do not match this surtax; it falls entirely on the employee.³

If You’re Self-Employed

When you work for yourself as a sole proprietor, independent contractor, or general partner, there’s no employer to split the bill with. You owe the full 15.3% yourself under the Self-Employment Contributions Act: 12.4% for Social Security and 2.9% for Medicare.⁴

The tax isn’t calculated on your gross revenue. You first subtract business expenses to find your net profit, then multiply that by 92.35%. That adjustment mimics the tax break W-2 workers get by having their employer cover half of FICA. So if your business nets $100,000, you’d pay self-employment tax on $92,350.⁴

The $184,500 Social Security wage base applies here too. Once your taxable self-employment income exceeds the cap, you stop paying the 12.4% Social Security portion and only owe the 2.9% Medicare portion on the excess.² The 0.9% Additional Medicare Tax applies to self-employment income above the same filing-status thresholds, pushing the total Medicare rate to 3.8% on high earnings.³

You get one meaningful offset. You can deduct half of your self-employment tax when calculating your adjusted gross income. The deduction doesn’t reduce the self-employment tax itself, but it does lower the income on which you owe regular income tax.⁴

You calculate the tax on Schedule SE, attached to your annual Form 1040. Filing is required if your net self-employment earnings reach $400.⁵ Because no one is withholding tax from your income during the year, you also make estimated tax payments each quarter using Form 1040-ES, covering both self-employment tax and income tax.⁶

What Happens If You Work More Than One Job

Each employer withholds Social Security tax independently based only on what they pay you. Neither employer knows about the other. When your combined wages pass $184,500, the total Social Security tax withheld across all jobs ends up higher than you actually owe.

You recover the overpayment by claiming a credit on your income tax return. If the total Social Security tax withheld across employers exceeds 6.2% of $184,500 (that’s $11,439 for 2026), the excess becomes a credit against your income tax. It doesn’t happen automatically through your employers; you need to claim it when you file. If you only work one job, your employer stops withholding Social Security tax once your wages hit the cap, so the issue doesn’t come up.

Who Doesn’t Have to Pay

Most workers can’t avoid these taxes, but a few narrow exemptions exist.

Students Working at Their School

If you’re enrolled at least half-time at a college or university and work for that same school, your wages are generally exempt from FICA taxes. The test is whether your educational role is primary and the job is secondary to your studies.⁷ The exemption doesn’t apply to postdoctoral researchers, medical residents, or career employees who happen to take classes. It also generally doesn’t cover work during summer breaks longer than five weeks unless you remain enrolled.

Nonresident Alien Students and Scholars

Foreign students on F-1, J-1, or M-1 visas who qualify as nonresident aliens are exempt from FICA on wages for authorized employment. The exemption typically applies during the first five calendar years in the United States. Once a visa holder becomes a resident alien for tax purposes, the exemption ends and normal FICA withholding begins.⁸

Certain Religious Workers

Ordained ministers, members of religious orders who haven’t taken a vow of poverty, and Christian Science practitioners can apply for exemption from self-employment tax on their ministerial earnings by filing Form 4361 with the IRS. The exemption is only available on religious or conscientious grounds; you must oppose accepting public insurance benefits like Social Security and Medicare for those services. Once granted, it’s generally permanent.

If You Pay a Household Worker

One situation that quietly turns ordinary people into employers: paying a nanny, housekeeper, in-home caregiver, or other household worker $3,000 or more in cash wages during 2026 makes you a household employer, and you owe FICA on those wages.⁹ The rates are the same as any other employment, 6.2% Social Security and 1.45% Medicare from both you and the worker, with the $184,500 wage base and the Additional Medicare Tax rules applying as usual.

You can either withhold the worker’s 7.65% share from their pay or cover it yourself. Either way, you’re responsible for paying the total amount. Household employers report everything annually on Schedule H, attached to their personal Form 1040.¹⁰ Many families don’t realize they’ve crossed into employer territory until they’ve already missed a year of tax obligations.

1
Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates
2
Social Security Administration. Contribution and Benefit Base
3
Internal Revenue Service. Topic No. 560, Additional Medicare Tax
4
Internal Revenue Service. Topic No. 554, Self-Employment Tax
5
Internal Revenue Service. Instructions for Schedule SE (Form 1040)
6
Internal Revenue Service. About Form 1040-ES, Estimated Tax for Individuals
7
Internal Revenue Service. Student Exception to FICA Tax
8
Internal Revenue Service. Foreign Student Liability for Social Security and Medicare Taxes
9
Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide
10
Internal Revenue Service. About Schedule H (Form 1040), Household Employment Taxes