What is FICA Tax?

FICA (Federal Insurance Contributions Act) tax is the federal payroll tax that funds Social Security and Medicare. In 2026, employees pay 7.65% of their wages, made up of 6.2% for Social Security on the first $184,500 and 1.45% for Medicare on every dollar, and employers pay a matching 7.65% on top.

FICA is a label for two taxes rather than one. The Social Security portion often appears on pay stubs as OASDI (Old-Age, Survivors, and Disability Insurance), and the Medicare tax portion as Medicare or HI (hospital insurance). Self-employed people pay the same two taxes under a companion law, the Self-Employment Contributions Act.

FICA Tax Rates for 2026

The Additional Medicare Tax is employee-only, and its thresholds are not adjusted for inflation. Your employer starts withholding it once the wages it pays you pass $200,000, regardless of your filing status, so a married couple can owe more or less than was withheld and settle the difference at filing on Form 8959.

What is FICA on My Paycheck?

FICA is the money withheld for Social Security and Medicare. Pay stubs label it in different ways: a single “FICA” line, or separate lines such as “OASDI” and “Medicare,” sometimes tagged “EE” for the employee share. Your employer’s matching half doesn’t show up as a deduction from your pay.

The wages FICA is calculated on aren’t always the same as the wages subject to income tax. Pre-tax contributions to a 401(k) lower your taxable income but not your FICA wages. Deductions run through a Section 125 cafeteria plan, such as health insurance premiums, a health FSA, or Health Savings Account (HSA) contributions made through payroll, lower both. Your W-2 shows the difference: Box 1 is income tax wages, while Boxes 3 and 5 are Social Security and Medicare wages.

FICA Paycheck Example

Say you’re paid $3,000 every two weeks, contribute 6% ($180) to a pre-tax 401(k), and pay a $100 health premium through your employer’s cafeteria plan.

The $180 401(k) deferral doesn’t change any of those numbers. It lowers the wages subject to income tax to $2,720, but FICA is still figured on $2,900. Your employer pays another $221.85, so over 26 paychecks each side contributes $5,768.10.

Funding an HSA through payroll has an edge over contributing on your own and deducting it at tax time. Both routes skip income tax, but only the payroll route skips FICA.

The 2026 FICA Wage Base Limit

The Social Security portion of FICA stops once your wages for the year reach the wage base, $184,500 in 2026. That caps the employee share at $11,439. The Social Security Administration adjusts the limit each year based on national wage growth. Medicare has no limit.

A single filer earning $250,000 at one employer, paid every two weeks, hits the wage base partway through the 20th paycheck, and Social Security withholding stops for the rest of the year. Their full-year FICA comes to $15,514: $11,439 for Social Security, $3,625 for Medicare, and $450 of Additional Medicare Tax on the $50,000 above $200,000. That’s about 6.2% of pay, compared with 7.65% for someone under the wage base.

Excess Social Security Tax Refund

Each employer applies the wage base on its own, because it doesn’t know what your other jobs paid. If you change jobs mid-year or hold two at once and your combined wages pass $184,500, you can end up overpaying.

Someone earning $120,000 at one job and $100,000 at another has $7,440 plus $6,200 withheld for Social Security, $13,640 in total. The most anyone owes for 2026 is $11,439, so the $2,201 excess comes back as a credit on Form 1040. Married couples figure this separately for each spouse.

The credit only applies across multiple employers. If a single employer withholds too much, you ask that employer to correct it, or file Form 843 for a refund.

FICA vs. Federal Income Tax

FICA is a flat-rate tax on earned income starting from the first dollar, with no standard deduction and no brackets apart from the Additional Medicare Tax. Federal income tax is progressive and applies to taxable income from nearly every source after deductions. Both are withheld from your paycheck; “FIT” on a pay stub means federal income tax withholding, a separate line from FICA.

The bigger difference is what each one touches. FICA and its self-employment counterpart apply only to wages and self-employment earnings, so interest, dividends, capital gains, pensions, Social Security benefits, and retirement account withdrawals are all outside it. Income tax applies to most of them. A dollar of salary and a dollar of IRA withdrawal can land in the same income tax bracket and still carry very different total tax.

If you compare the Effective Tax Rate in ProjectionLab’s tax analytics with the rate on your return, expect it to run higher during working years, since it counts FICA alongside income tax.

FICA for the Self-Employed

Self-employed people pay both halves of FICA themselves as self-employment (SE) tax: 15.3% (12.4% Social Security plus 2.9% Medicare) on 92.35% of net earnings, or about 14.1% of profit. It applies once net earnings reach $400, the Social Security part shares the same $184,500 wage base as any W-2 wages you earn, and you can deduct half of it when figuring adjusted gross income. The side hustle entry walks through how SE tax works when it stacks on top of a day job.

Who Is Exempt From FICA Taxes?

• Students working for their school. Students employed by the school, college, or university where they’re enrolled can be exempt, as long as education rather than employment is the main relationship.
• Certain nonresident aliens. F-1, J-1, M-1, and Q-1 visa holders are exempt on work their visa authorizes, until they become resident aliens for tax purposes.
• Members of certain religious groups that have existed continuously since December 31, 1950 and are conscientiously opposed to insurance benefits, including Social Security. Members apply with Form 4029 and give up eligibility for those benefits. For wages, the exemption works only when the employer holds the same exemption.
• Some state and local government employees covered by a qualifying public retirement system instead of Social Security. They skip the Social Security portion, but those hired after March 31, 1986 generally still pay Medicare tax.

Frequently Asked Questions

What does FICA stand for? Federal Insurance Contributions Act, the federal law that sets the payroll taxes funding Social Security and Medicare.

Is FICA the same as Social Security? No. Social Security tax is the larger of FICA’s two parts, 6.2% of wages up to the wage base. The other part is Medicare tax at 1.45% with no cap.

How much is FICA tax? 7.65% of wages for employees in 2026, matched by employers for 15.3% in total. The 6.2% Social Security portion stops at $184,500 of wages, the 1.45% Medicare portion continues on all wages, and an extra 0.9% applies above the Additional Medicare Tax threshold for your filing status ($200,000 single, $250,000 married filing jointly, $125,000 married filing separately).

Do employers pay FICA? Yes. Employers pay 6.2% for Social Security up to the wage base and 1.45% for Medicare on all wages, matching what they withhold from you. They don’t match the 0.9% Additional Medicare Tax.

Do you pay FICA on 401(k) withdrawals? No. Withdrawals from a 401(k) or IRA aren’t wages, so FICA doesn’t apply. They are subject to income tax, though, and they raise your modified adjusted gross income (MAGI), which can trigger IRMAA surcharges on Medicare premiums.

Can I get a FICA refund? Yes, when more than one employer withheld Social Security tax and your combined wages passed $184,500 in 2026. You claim the excess as a credit on Form 1040. If a single employer over-withheld, ask that employer for a correction or file Form 843.