Social Security and Medicare Tax (FICA) Explained
FICA stands for the Federal Insurance Contributions Act. It is the payroll tax that funds Social Security and Medicare, and it shows up on every paycheck separately from income tax.
The rates
| Tax | Employee rate | Limit (2026) |
|---|---|---|
| Social Security | 6.2% | Wages up to $184,500 |
| Medicare | 1.45% | No limit |
| Additional Medicare | 0.9% | Wages above $200,000 |
Employers pay a matching 6.2% and 1.45%. The extra 0.9% is paid by the employee only.
The Social Security wage base
Social Security tax applies only up to a yearly cap, called the wage base. For 2026 it is $184,500. Earnings above that are not subject to Social Security tax. The most an employee can pay in 2026 is $11,439.
Example
On a $75,000 salary, Social Security is $4,650 and Medicare is $1,088, for a combined $5,738 a year, or 7.65% of pay.
Is FICA tax the same as income tax?
No. FICA is a flat percentage with no brackets and no standard deduction. Pre-tax 401(k) contributions reduce income tax but do not reduce Social Security or Medicare tax. Health insurance premiums paid through a workplace cafeteria plan are usually exempt from both.
Why it matters to you
Your Social Security tax builds your work record, which determines your future retirement benefit. Medicare tax funds hospital insurance for people 65 and older.
Self-employed workers
Freelancers pay both halves, about 15.3% in total. See self-employment tax for freelancers.
Last reviewed: October 2026. Figures are for tax year 2026. This guide is general information, not tax, legal or financial advice.
About the author
Hari Nepal, founder and editor of Kbtrim Salary. Hi, I'm Hari Nepal, based in Nepal. I built Kbtrim Salary to make money numbers easier to understand, with free calculators that explain how they work instead of hiding the math. I use published IRS and state tax figures and update them every year. I'm not a tax professional, so the tools give estimates, not advice. If you find a mistake, please email me at harinepal2062@gmail.com. More about this site.