Look at any U.S. pay stub and you'll see a line labeled "FICA" sitting right next to federal and state income tax. Unlike income tax, which is graduated and depends on your bracket, FICA is a flat-rate payroll tax split between two specific programs: Social Security (retirement, disability, and survivor benefits) and Medicare (health coverage for people 65+ and some younger people with disabilities).
How the Rate Breaks Down
| Component | Employee Pays | Employer Pays |
|---|
| Social Security | 6.2% | 6.2% |
| Medicare | 1.45% | 1.45% |
| Total | 7.65% | 7.65% |
Notice the Social Security portion has an annual wage cap (adjusted yearly — $168,600 in 2024), above which no further Social Security tax is withheld for the rest of the year. Medicare's 1.45% has no cap at all, and high earners above certain thresholds ($200,000 single / $250,000 married filing jointly) owe an additional 0.9% Medicare surtax.
Worked Example
Take a W-2 employee earning $60,000/year, paid biweekly ($2,307.69 per paycheck):
- Social Security (6.2%): $2,307.69 × 0.062 = $143.08
- Medicare (1.45%): $2,307.69 × 0.0145 = $33.46
- Total FICA per paycheck: $176.54
- Total FICA for the year: $60,000 × 7.65% = $4,590
Their employer separately pays a matching $4,590 to the IRS on their behalf — money that never appears on the employee's pay stub but is a real cost of employing them.
💡 Pro Tip: Self-employed workers owe the full 15.3% self-employment tax on net earnings, but can deduct the employer-equivalent half (7.65%) as an above-the-line adjustment when filing — softening, though not eliminating, the extra burden of paying "both sides."
Figures above are illustrative examples only and not tax advice. Wage caps, surtax thresholds, and rates are set annually by the IRS/SSA and should be verified for the current tax year.
Frequently Asked Questions
What does FICA stand for?
FICA stands for the Federal Insurance Contributions Act, the law that established payroll tax funding for Social Security and Medicare in the United States.
What is the FICA tax rate?
The combined employee FICA rate is 7.65%: 6.2% for Social Security and 1.45% for Medicare. Employers match this, bringing the total contribution to 15.3% of wages.
Is there a cap on FICA tax?
The Social Security portion (6.2%) only applies up to an annual wage base limit, adjusted yearly ($168,600 in 2024). Medicare's 1.45% has no wage cap; high earners above certain thresholds pay an extra 0.9% Medicare surtax.
Do self-employed people pay FICA tax?
Yes, but it's called self-employment tax instead, and self-employed workers pay both the employee and employer halves — 15.3% total — since there's no separate employer to split it with.
Is FICA tax the same as federal income tax?
No. FICA funds Social Security and Medicare specifically and is withheld at a flat rate regardless of income bracket. Federal income tax funds general government spending at graduated rates based on income and filing status.
Can I get FICA tax refunded?
Generally no — FICA isn't reconciled on your tax return the way income tax withholding is. The main exception is if you overpaid Social Security tax because you worked multiple jobs and your combined wages exceeded the annual wage base.