Social Security tax stops coming out of your paycheck once your year-to-date wages reach the annual wage base, which is $184,500 for 2026. Medicare tax works differently: it applies to every dollar of covered wages and never stops, and high earners pay an extra 0.9% on top of the standard rate. A short list of workers is legally exempt from both taxes, but for almost everyone else the answer to when you stop paying Medicare and Social Security taxes is “when you stop having earned income” for Medicare, and “when you cross the wage cap each calendar year” for Social Security.
The Social Security Wage Cap Resets Every Year
The Social Security piece of FICA is 6.2% of wages, applied only up to a dollar ceiling that Congress adjusts annually. For 2026, that ceiling is $184,500.1Social Security Administration. Contribution and Benefit Base Federal law calls it the “contribution and benefit base.”2Office of the Law Revision Counsel. 26 USC 3121 – Definitions Once your cumulative earnings for the year cross that line, your employer stops withholding the 6.2% and also stops paying the matching employer share. Withholding starts again on January 1, when the counter goes back to zero.
For someone paid well above the cap, the boost in take-home pay is real but temporary. Earn $250,000 in salary and you pay Social Security tax on the first $184,500 and nothing on the remaining $65,500, saving roughly $4,061 in the back half of the year. The cap applies to each calendar year on its own, so nothing carries over.
Medicare Tax Has No Cap
Medicare tax is 1.45% of wages, with a matching 1.45% from your employer, and there is no ceiling. Whether you make $30,000 or $3 million, the deduction keeps coming out of every paycheck. No point in the year exists where it pauses.
High earners face a second layer. Once your wages exceed $200,000 in a calendar year, an additional 0.9% Medicare surcharge applies to every dollar above that threshold.3Internal Revenue Service. Questions and Answers for the Additional Medicare Tax Your employer begins withholding it automatically once you pass $200,000, regardless of filing status. What you actually owe, though, depends on how you file:
- Single or head of household: $200,000
- Married filing jointly: $250,000
- Married filing separately: $125,000
Because employers use the flat $200,000 trigger but the IRS uses your filing status to figure the real bill, mismatches happen. A married couple filing jointly who each earn $150,000 will have no Additional Medicare Tax withheld and won’t owe any, since their combined wages stay below $250,000. A single filer earning $190,000 in wages plus self-employment income could owe the surcharge without any of it being withheld at work.4Internal Revenue Service. Topic No. 560, Additional Medicare Tax
Bonuses and Multiple Jobs
Bonuses, commissions, and other supplemental pay count toward the Social Security wage cap the same way regular wages do. Your employer tracks the year-to-date total and stops the 6.2% withholding once you cross $184,500.5Social Security Administration. Maximum Taxable Earnings A large year-end bonus can push you over mid-paycheck; only the portion below the cap is taxed.
With two employers, the problem is that each one only sees its own payroll. If you hold two jobs paying $120,000 apiece, both withhold 6.2% on every dollar, and you end up paying Social Security tax on $240,000 rather than $184,500. You recover the overpayment at tax time by claiming it as a credit on your federal income tax return.6Internal Revenue Service. Topic No. 608, Excess Social Security and RRTA Tax Withheld On a joint return, each spouse figures the overpayment separately.
Self-Employment: Same Cap, Same No-Cap, Doubled Rates
Self-employed workers pay both halves of FICA through the Self-Employment Contributions Act. That’s 12.4% for Social Security and 2.9% for Medicare, or 15.3% total on net earnings.1Social Security Administration. Contribution and Benefit Base The Social Security portion stops at the same $184,500 wage base that applies to employees. The Medicare portion has no cap and never stops.
Two adjustments soften the hit. Before calculating self-employment tax, you multiply net earnings by 92.35%, which mirrors the fact that employees don’t pay FICA on the employer’s share. And you can deduct half of your total self-employment tax when figuring adjusted gross income, which reduces your income tax bill but not the self-employment tax itself.7Internal Revenue Service. Topic No. 554, Self-Employment Tax
The 0.9% Additional Medicare Tax applies to self-employment income too, using the same filing-status thresholds. If you have both wages and self-employment income, the IRS combines them when checking whether you’ve crossed the threshold.
Retirement Doesn’t End the Obligation
Reaching retirement age or starting Social Security benefits does not exempt you from FICA. If you keep working, your employer keeps withholding 6.2% and 1.45% from every paycheck, and self-employed retirees keep paying SECA on net earnings.8Social Security Administration. What Happens if I Work and Get Social Security Retirement Benefits? Drawing benefits and paying into the system happen at the same time. One does not cancel the other.
Who Is Exempt from FICA Entirely
Most workers cannot opt out. Federal law does carve out specific exemptions based on the nature of the work or the worker’s status.
Students Working for Their School
Students employed by the school, college, or university where they are enrolled and regularly attending classes are exempt from FICA on those wages.2Office of the Law Revision Counsel. 26 USC 3121 – Definitions The job has to be with the school itself. A full-time student working at an off-campus restaurant doesn’t qualify. Certain affiliated organizations that exist solely to support the university also fall within the exemption.
Members of Recognized Religious Groups
If you belong to a recognized religious group that is conscientiously opposed to accepting public insurance benefits, you can apply for a full exemption using IRS Form 4029.9Internal Revenue Service. About Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits The exemption comes with a permanent waiver of all rights to Social Security and Medicare benefits. It is not a deferral or a reduced rate but a complete exit, and reversing it is difficult.
Certain State and Local Government Employees
State and local government workers covered by a qualifying public retirement system may be exempt from Social Security tax, depending on when they were hired and whether their state entered into a coverage agreement with the Social Security Administration.10Internal Revenue Service. State and Local Government Employees Social Security and Medicare Coverage Employees hired before April 1, 1986, and covered by such a plan may also be exempt from Medicare tax. Most government workers hired after that date owe Medicare tax regardless of their pension coverage.
Foreign Government Employees and Certain Nonresident Aliens
Employees of foreign governments, including diplomats, consular officers, and staff of international organizations, are not subject to FICA on that compensation.11Internal Revenue Service. Employees of a Foreign Government or International Organization (FICA) Including Social Security and Medicare Tax Nonresident aliens on certain visa types also qualify. Foreign scholars and researchers on J-1 or Q-1 visas who have been in the country for fewer than two calendar years are generally exempt.12Internal Revenue Service. Alien Liability for Social Security and Medicare Taxes of Foreign Teachers, Foreign Researchers and Other Foreign Professionals Workers from countries with totalization agreements with the United States may also avoid double taxation by staying covered under their home country’s system.
Household Employees Below the Wage Threshold
If you hire someone for household work, such as a nanny, housekeeper, or home health aide, you don’t owe FICA on their wages unless you pay them $3,000 or more in cash during 2026.13Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide Below that amount, neither party owes Social Security or Medicare tax on the wages. Once the $3,000 threshold is crossed, FICA applies to all the cash wages paid during the year, not just the amount above the threshold.