What Is FICA? Social Security and Medicare Explained

7 min read · Updated 2026-06-27

Look closely at your pay stub and you'll almost always find two lines labeled something like "Social Security" and "Medicare," or sometimes a single line marked "FICA." Together they're one of the largest deductions from your paycheck, yet most people have never been told what they actually pay for. This guide explains FICA in full: what it is, how much you pay, the limits, and why it matters.

What FICA is

FICA stands for the Federal Insurance Contributions Act. It's the payroll tax that funds two of the largest US social programs: Social Security (retirement, disability, and survivor benefits) and Medicare (health coverage for people 65 and older, and some younger people with disabilities). Unlike income tax, FICA is not progressive — it's a flat percentage of your wages.

The two parts of FICA

Social Security: 6.2%, with a cap

The Social Security portion is 6.2% of your wages — but only up to an annual ceiling called the wage base limit. For 2025 that limit is $176,100. Once your year-to-date wages pass it, Social Security tax stops for the rest of the year. That means the maximum Social Security tax an employee pays in 2025 is 6.2% × $176,100 = $10,918.20.

Medicare: 1.45%, no cap

The Medicare portion is 1.45% of all your wages — there is no wage base limit. Someone earning $500,000 pays Medicare tax on the full amount, whereas Social Security tax stopped at $176,100.

The Additional Medicare Tax

High earners pay an extra 0.9% Additional Medicare Tax on wages above a threshold that depends on filing status:

• $200,000 for single filers and heads of household
• $250,000 for married couples filing jointly

Employers begin withholding this extra 0.9% once an employee's wages exceed $200,000, regardless of filing status, and any over- or under-withholding is reconciled on your tax return.

Adding it up: the 7.65% combined rate

For most workers, FICA totals 7.65% of their paycheck (6.2% + 1.45%). On a $50,000 salary that's $3,825 a year. Your employer pays an identical 7.65% on top — so the government actually collects 15.3% in total for each employee. If you're self-employed, you pay both halves yourself through the Self-Employment Contributions Act (SECA) tax, though you can deduct the "employer" half.

FICA vs income tax: a common confusion

FICA and federal income tax are completely separate. Income tax is progressive, depends on deductions and credits, and can be adjusted via your W-4. FICA is a flat rate, can't be reduced by deductions, and funds specific programs rather than the government's general budget. Both appear on your pay stub, which is why it helps to know how to read each line.

See it on your paycheck

Our paycheck calculator separates Social Security and Medicare into their own lines so you can see exactly how much FICA costs you each pay period. It also handles the wage base limit and Additional Medicare Tax automatically. To understand the rest of your withholding, see how paycheck taxes work.