Two federal taxes come out of every paycheck at a fixed rate: Social Security and Medicare. Together they are FICA, short for the Federal Insurance Contributions Act. You pay 7.65% of your wages, and your employer adds the same amount from its own funds.
That makes FICA 15.3% of wages in total, split evenly. Unlike income tax, nothing about your W-4, filing status or dependents changes it. The only things that move it are how much you earn and a few narrow exemptions.
The two taxes inside FICA
FICA is two separate taxes that payroll often lumps together:
- Social Security (also called OASDI): 6.20% from the employee and 6.20% from the employer, on wages up to $184,500 in 2026.
- Medicare (also called HI, hospital insurance): 1.45% from each side on every dollar of wages, with no cap.
- Additional Medicare: another 0.9% withheld from the employee only, on wages over $200,000 in the year.
The rates come from IRS Publication 15 and Topic 751; the wage base is set each year by the Social Security Administration. The Social Security half has its own walkthrough, with stub labels and refunds, in OASDI on a paycheck.
FICA on one paycheck, both sides
Take an employee paid $2,750 every two weeks. The pay stub shows only the left column. The employer owes the middle column out of its own pocket and sends both to the IRS together.
| Tax | Withheld from the employee | Paid by the employer | Sent to the IRS |
|---|---|---|---|
| Social Security (6.2% each) | $170.50 | $170.50 | $341.00 |
| Medicare (1.45% each) | $39.88 | $39.88 | $79.76 |
| Total FICA | $210.38 | $210.38 | $420.76 |
So a job that pays $2,750 a check actually costs the employer more than that before any benefits. When a business budgets for a new hire, FICA is the first cost on top of wages, ahead of federal and state unemployment tax. Our FUTA guide covers the federal unemployment piece.
Employee share, employer share
Employees and employers pay equal shares, with one exception: Additional Medicare is the employee’s alone. IRS Publication 15 says plainly that there is no employer share of it, so an employer’s Medicare stays at 1.45% however much someone earns.
People who work for themselves pay both halves. Self-employment tax is the same 15.3% combined rate, charged on 92.35% of net earnings once they reach $400. It is paid with the income tax return, not through payroll. The W-2 vs 1099 comparison puts that difference in dollars.
When FICA changes during the year
For most people FICA is the same on every check. The exceptions come at the top end, where two limits apply to year-to-date wages. We ran a $260,000 salary, paid in 26 checks of $10,000, through the same rules our pay stub generator uses:
Social Security comes out in full until the check that carries year-to-date wages past $184,500. That check withholds Social Security on only part of its wages, and every check after it withholds none. Medicare keeps going, and once wages pass $200,000 the extra 0.9% joins it.
| Paycheck | Social Security withheld | Medicare withheld | Employee FICA | Employer FICA |
|---|---|---|---|---|
| Checks 1 to 18 | $620.00 | $145.00 | $765.00 | $765.00 |
| Check 19 | $279.00 | $145.00 | $424.00 | $424.00 |
| Check 20 | $0.00 | $145.00 | $145.00 | $145.00 |
| Checks 21 to 26 | $0.00 | $235.00 | $235.00 | $145.00 |
| Year | $11,439.00 | $4,310.00 | $15,749.00 | $15,209.00 |
The employee ends up paying more FICA than the employer, by exactly the Additional Medicare. The limits also run per employer. Someone with two jobs can have too much Social Security withheld, and the excess comes back as a credit on the tax return.
Additional Medicare can also be off at tax time. Employers must start withholding it once they pay someone more than $200,000, whatever that person’s filing status. The tax actually owed depends on combined household wages. Any difference is settled on Form 8959.
How FICA appears on a pay stub
Stubs rarely print the word FICA alone. These are the labels you are most likely to see:
| Label | Meaning |
|---|---|
| FICA | Social Security and Medicare combined into one line |
| FICA-SS, SS, OASDI | Social Security only |
| FICA-MED, MED, MEDI, HI | Medicare only, including any Additional Medicare |
| EE or ER after a label | Employee share or employer share |
An ER line on an employee’s stub is information only; it was not taken from your pay. The FICA lines are also figured on a different base from federal income tax. Health premiums paid through a cafeteria plan lower both, while a traditional 401(k) lowers only income tax. The pre-tax deductions breakdown shows the difference on one paycheck.
See FICA worked out on a pay stub
How employers report and deposit FICA
Withholding is only half the job. Every quarter, the employer reports the withheld income tax and both shares of FICA on Form 941. It is due the last day of the month after the quarter ends.
The money itself goes in earlier, by electronic deposit. Publication 15 sets the schedule with a lookback rule. An employer that reported $50,000 or less of these taxes in the lookback period deposits monthly. More than that means semiweekly. Any day the undeposited total reaches $100,000, it is due the next business day.
At year end the same wages land on each employee’s W-2. Social Security wages and tax go in boxes 3 and 4, and Medicare wages and tax in boxes 5 and 6. Our W-2 generator lays those boxes out from the year’s totals.
Who does not pay FICA?
Almost every employee pays it, and you cannot opt out by request. The exemptions are written into the law for specific situations:
- Students working for their own school. A student who is enrolled and regularly attends classes pays neither tax on wages from that school, college or university (Publication 15, section 15).
- Some foreign students and scholars. Nonresident alien students in F-1, J-1 or M-1 status are generally exempt on work their visa allows, usually for their first five years in the US (IRS).
- Children working for a parent. A child under 18 employed by a parent’s sole proprietorship, or a partnership owned only by the parents, is exempt (Publication 15, section 3).
- Some state and local government workers. Employees in a public retirement system may be outside Social Security, but anyone hired after March 31, 1986 generally pays Medicare (SSA).
Each rule has conditions, so an employer should check the exact wording before leaving FICA off a check.
