FICA tax is paid by both the worker and the employer: if you get a W-2, your employer withholds 6.2% of your wages for Social Security and 1.45% for Medicare, then pays a matching 6.2% and 1.45% out of its own pocket, for a combined 15.3% on your covered wages. If you’re self-employed, you pay both halves yourself. A smaller group of workers — certain students, members of qualifying religious sects, some visa holders, and some state and local government employees — are exempt from part or all of it.
The Standard Employee-Employer Split
Your employer takes 6.2% of your gross wages for Social Security and 1.45% for Medicare before your paycheck reaches you.1Office of the Law Revision Counsel. 26 USC 3101 – Rate of Tax The employer then matches those amounts dollar for dollar from its own funds.2Office of the Law Revision Counsel. 26 USC 3111 – Rate of Tax That employer share is a business expense; it cannot legally be deducted from your salary.
The Social Security piece has a ceiling. Once your wages hit the annual wage base, the 6.2% withholding stops for the rest of the calendar year. For 2026, the cap is $184,500.3Social Security Administration. 2026 Cost-of-Living Adjustment (COLA) Fact Sheet Medicare has no cap; the 1.45% keeps coming out no matter how much you earn.
If you change jobs mid-year and your combined wages from both employers cross the wage base, each employer still withholds independently on what it pays you. You get the excess Social Security tax back when you file your return.
The Extra 0.9% on Higher Earnings
On top of the 1.45% Medicare withholding, an Additional Medicare Tax of 0.9% applies once wages pass a threshold that depends on your filing status.1Office of the Law Revision Counsel. 26 USC 3101 – Rate of Tax The thresholds are $250,000 for married couples filing jointly, $125,000 for married filing separately, and $200,000 for single filers and everyone else.
Your employer starts withholding the extra 0.9% once your wages pass $200,000 in a calendar year, regardless of how you actually file.4Internal Revenue Service. Topic No. 560, Additional Medicare Tax If you file jointly and your household threshold is higher, you settle up on your return. Employers do not match the Additional Medicare Tax; you pay all of it.
Self-Employed: You Pay Both Halves
When you work for yourself, there’s no employer to cover the other side, so you owe both. The Self-Employment Contributions Act sets the rate at 12.4% for Social Security and 2.9% for Medicare — a combined 15.3%.5Office of the Law Revision Counsel. 26 USC 1401 – Rate of Tax The 0.9% Additional Medicare Tax applies the same way it does for employees, using the same filing-status thresholds.
You don’t apply 15.3% to your full net profit, though. First you multiply net earnings by 92.35%, which mirrors the fact that employees aren’t taxed on the employer’s share of FICA.6Internal Revenue Service. Topic No. 554, Self-Employment Tax On $100,000 of net self-employment income, the taxable base is $92,350 and the self-employment tax works out to roughly $14,130, not $15,300.
The tax code also lets you deduct half of your self-employment tax when figuring adjusted gross income, which reduces your income tax.7Office of the Law Revision Counsel. 26 USC 164 – Taxes The 0.9% Additional Medicare portion isn’t included in that deduction. And you only owe self-employment tax at all if your net earnings reach $400 or more for the year.8Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes)
Because no one is withholding from your income, the IRS expects quarterly estimated payments. For 2026, those are due April 15, June 15, September 15, and January 15, 2027.9Internal Revenue Service. 2026 Form 1040-ES You can skip the January payment if you file the return and pay any balance by February 1, 2027. You report the tax itself on Schedule SE with your Form 1040.10Internal Revenue Service. About Schedule SE (Form 1040), Self-Employment Tax
Hiring Someone to Work in Your Home
If you pay a nanny, housekeeper, caregiver, or other household worker, you may owe FICA as a household employer. For 2026, the obligation kicks in once you pay a single household worker $3,000 or more in cash wages during the calendar year.11Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide Below that threshold, nobody owes Social Security or Medicare tax on those wages.
Once you cross the line, you withhold the worker’s 7.65% share and pay a matching 7.65% yourself. You’ll need an Employer Identification Number and you’ll issue a W-2 to each household employee. Instead of filing quarterly like a business, household employers report the taxes on Schedule H attached to their personal Form 1040.12Internal Revenue Service. Topic No. 756, Employment Taxes for Household Employees
When Family Members Are on the Payroll
Hiring relatives changes the FICA answer in ways that catch people off guard. A spouse who works for your sole proprietorship is treated like any other employee: you withhold Social Security and Medicare and pay the matching share.13Internal Revenue Service. Married Couples in Business
Children employed by a parent get more favorable treatment, but only in certain business structures:14Internal Revenue Service. Family Employees
- In a sole proprietorship or a partnership where both partners are the child’s parents, a child under 18 is exempt from Social Security and Medicare taxes.
- For domestic work in a parent’s home, that exemption extends until the child turns 21.
- In a corporation, or a partnership that includes non-parent partners, no exemption applies regardless of the child’s age.
The business structure matters more than the family tie. A parent who incorporates and puts a teenager on the payroll owes FICA on every dollar; the same job through a sole proprietorship would be FICA-free.
Who Is Exempt from FICA
Students Working at Their Own School
If you’re enrolled and regularly attending classes at a college or university and you also work for that same institution, your wages are generally exempt from FICA.15Office of the Law Revision Counsel. 26 USC 3121 – Definitions The test is whether your employment is “incident to and for the purpose of pursuing a course of study” at the school.16Internal Revenue Service. Student FICA Exception Research assistantships and library jobs typically qualify. If your work looks full-time and your classes look like a side activity, the IRS may decide the exemption doesn’t apply.
Members of Recognized Religious Sects
Members of certain religious groups that have provided for their own dependents since at least December 31, 1950, can apply to be exempted from both Social Security and Medicare taxes. You file Form 4029 and show that the sect’s teachings oppose accepting public or private insurance benefits.17Internal Revenue Service. Publication 517 (2025), Social Security and Other Information for Members of the Clergy and Religious Workers Approval means permanently waiving your own Social Security and Medicare benefits.
For employees, both employer and employee must belong to the qualifying sect. Each files a separate approved application, and the exemption covers only the wages between that specific pair.18Office of the Law Revision Counsel. 26 USC 3127 – Exemption for Employers and Their Employees If the employer is a partnership, every partner has to be a sect member too.
Certain Nonresident Aliens
Foreign students on F-1, J-1, or M-1 visas are generally exempt from FICA on wages tied to the purpose of their visa, so long as they remain nonresident aliens for tax purposes.19Internal Revenue Service. Foreign Student Liability for Social Security and Medicare Taxes Non-student aliens on J-1 or Q-1 visas — researchers, teachers, and cultural exchange participants — also qualify for a temporary exemption during their initial period in the U.S.20Internal Revenue Service. Alien Liability for Social Security and Medicare Taxes of Foreign Teachers, Researchers, and Other Foreign Professionals The exemption ends once the person becomes a resident alien for tax purposes or changes to a non-exempt immigration status.
Some State and Local Government Workers
State and local government employees may be exempt from the Social Security portion of FICA if their position is covered by a qualifying public retirement system and their employer never entered into a voluntary Section 218 Agreement with the Social Security Administration.21Social Security Administration. Section 218 Agreements Even then, government employees hired after March 31, 1986, still owe the Medicare portion.22Social Security Administration. How State and Local Government Employees Are Covered by Social Security and Medicare The practical result: newer public employees always pay the 1.45% Medicare tax even when they escape the 6.2% Social Security tax.