FICA — the Federal Insurance Contributions Act — was passed in 1935 to fund retirement benefits and expanded in 1965 to include Medicare. Today FICA funds two of the largest social insurance programs in the United States:
Both you and your employer pay FICA. Your share is withheld from each paycheck. Your employer then matches your contribution dollar for dollar and sends the combined amount to the IRS.
The following rates are official for tax year 2026, confirmed from IRS Publication 926 and Mercer Advisors' 2026 payroll guide, which cites IRS guidance directly.
| Tax | Employee Rate | Employer Rate | Wage Cap (2026) |
|---|---|---|---|
| Social Security (OASDI) | 6.2% | 6.2% | $184,500 |
| Medicare (HI) | 1.45% | 1.45% | No cap |
| Combined FICA | 7.65% | 7.65% | — |
| Additional Medicare Tax | 0.9% | Not applicable | Above $200k (single) / $250k (MFJ) |
The Social Security wage base increased from $176,100 in 2025 to $184,500 in 2026. This means the maximum Social Security tax an employee pays in 2026 is $184,500 × 6.2% = $11,439. Once your wages hit $184,500 for the year, Social Security withholding stops for the rest of the year.
Here is exactly how much FICA comes out of each paycheck at common salary levels, calculated monthly:
| Annual Salary | SS/mo (6.2%) | Medicare/mo (1.45%) | Total FICA/mo | Total FICA/yr |
|---|---|---|---|---|
| $40,000 | $207 | $48 | $255 | $3,060 |
| $60,000 | $310 | $73 | $383 | $4,590 |
| $75,000 | $388 | $91 | $478 | $5,738 |
| $100,000 | $517 | $121 | $638 | $7,650 |
| $150,000 | $775 | $181 | $956 | $11,475 |
| $184,500+ (SS caps here) | $952 (max) | varies | — | SS max: $11,439 |
FICA and federal income tax are separate withholdings that serve completely different purposes:
| FICA | Federal Income Tax | |
|---|---|---|
| Purpose | Funds SS and Medicare programs | Funds general government operations |
| Rate | Flat: 6.2% + 1.45% | Progressive: 10% to 37% |
| Standard deduction? | No — applies to all wages | Yes — $16,100 single / $32,200 MFJ in 2026 |
| Wage cap? | SS stops at $184,500; Medicare has no cap | No cap — all income taxed |
| Employer matches? | Yes — employer pays equal amount | No |
Employees earning above certain thresholds pay an extra 0.9% Medicare tax. This Additional Medicare Tax (AMT) applies only to the employee — employers do not match it:
Employers withhold the 0.9% once your wages from that employer exceed $200,000, regardless of your filing status. If you have multiple employers, you may overpay during the year and reconcile on your tax return.
Self-employed individuals pay both the employee and employer share of FICA under the Self-Employment Contributions Act (SECA). The total rate is 15.3% — 12.4% for Social Security (on net self-employment income up to $184,500) and 2.9% for Medicare (on all net self-employment income). You can deduct half of self-employment tax from gross income when calculating your adjusted gross income, partially offsetting the cost.
Yes, in a meaningful way — the FICA taxes you pay build your Social Security earnings record. Higher lifetime earnings generally result in higher monthly benefits when you claim Social Security. The Social Security Administration calculates your benefit using your 35 highest-earning years, indexed to current wages. Every year you pay into the system and every year you work longer affects your eventual benefit amount.
FICA stands for the Federal Insurance Contributions Act. It requires employees and employers to each pay 6.2% for Social Security and 1.45% for Medicare on every paycheck. In 2026, Social Security applies to wages up to $184,500. Medicare applies to all wages with no cap. Self-employed individuals pay the full 15.3% combined rate.
In 2026, you pay 6.2% Social Security on wages up to $184,500 and 1.45% Medicare on all wages. Combined FICA is 7.65% of your gross pay up to the Social Security cap. On a $60,000 salary, FICA totals $4,590 per year or $382.50 per month deducted from your paycheck.
Almost all W-2 employees pay FICA. Narrow exceptions include certain student workers employed by their school, some state and local government employees covered by alternative pension systems, certain nonresident alien workers, and specific religious workers. Self-employed individuals pay the full 15.3% self-employment tax which covers both shares.
Social Security withholding automatically stops once your wages from all employers reach $184,500 for the year in 2026. This is the Social Security wage base limit. Medicare withholding continues at 1.45% on all wages throughout the year with no cap. If you have multiple employers, each withholds SS until your wages with that employer hit the cap.
No. FICA taxes are mandatory for virtually all employees. You cannot opt out or reduce your FICA withholding. Pre-tax retirement contributions like 401(k) reduce your federal income tax withholding but do not reduce FICA taxes. FICA applies to gross wages before any deductions.