FICA tax explained: 2026 rates, the wage cap and who pays what

What is FICA tax?

FICA tax is the federal payroll tax that funds Social Security and Medicare, withheld from almost every paycheck in the United States. The name comes from the Federal Insurance Contributions Act, the law that imposes it, which is the short answer to the common search for FICA meaning.

FICA has two parts. The Social Security part (sometimes labeled OASDI on pay stubs) pays retirement, disability and survivor benefits. The Medicare part (often shown as "Med" or "HI") pays for hospital insurance. Both are separate from federal income tax, and both are charged on your first dollar of wages with no standard deduction and no brackets.

Because FICA is flat, it hits lower earners at the same percentage as middle earners. That is the main reason people call it a payroll tax rather than an income tax: it is figured on gross wages each pay period, not on taxable income once a year.

What is the FICA tax rate for 2026?

The 2026 FICA tax rate for employees is 7.65% of wages: 6.2% for Social Security and 1.45% for Medicare, according to IRS Topic 751. Your employer pays another 7.65%, so the combined rate on a paycheck is 15.3%.

These percentages are set in the tax code and have not changed for many years. What changes each year is the Social Security wage base, the dollar ceiling for the 6.2% part. For 2026 it is $184,500, up from $176,100 in 2025 (IRS Publication 15).

Is there a cap on FICA?

Only half of FICA has a cap. Social Security tax stops once your wages from one employer reach $184,500 in 2026, so the most an employee can pay is $11,439. Medicare tax has no ceiling and applies to every dollar you earn.

The cap works per employer for withholding purposes but per person for the final tax. If two jobs together push you past $184,500, each employer keeps withholding, and you claim the overpayment back on your return. Our page on Social Security tax and the wage base shows the math and the exact form to use.

The 2027 wage base is $192,300, announced by the Social Security Administration on October 14, 2026 with the cost-of-living adjustment. For wages paid in 2027 the maximum employee Social Security tax is therefore $11,922.60, and the employer pays the same; the 2027 Social Security wage base page shows how it was set.

How much FICA tax comes out of a paycheck?

Multiply gross wages by 7.65% until you pass the wage base, then by 1.45% alone. The table below shows full-year 2026 amounts for a single employee with one job and no pre-tax cafeteria plan deductions.

At $250,000, the employer withholds the 0.9% Additional Medicare Tax on the $50,000 above $200,000, which adds $450. Whether you actually owe it depends on your filing status, as explained in our guide to the Additional Medicare Tax. The full breakdown of the 1.45% part is on the Medicare tax rate page.

On your Form W-2, box 3 shows Social Security wages, box 4 the Social Security tax withheld, box 5 Medicare wages and box 6 the Medicare tax withheld. Box 4 should equal 6.2% of box 3, and box 6 should be at least 1.45% of box 5.

What does the employer pay in payroll tax?

Employers pay a matching 6.2% Social Security tax and 1.45% Medicare tax on each employee's wages, up to the same $184,500 Social Security cap. The employer never matches the 0.9% Additional Medicare Tax. Employers report both shares, plus income tax withheld, on Form 941 each quarter.

Most employers also owe the Federal Unemployment Tax (FUTA), reported on Form 940. IRS Topic 759 sets the FUTA rate at 6.0% on the first $7,000 of each employee's wages, reduced to 0.6% after a credit of up to 5.4% for state unemployment tax paid in full. FUTA is an employer-only payroll tax and never appears as a deduction on your pay stub.

Do self-employed people pay FICA?

Self-employed people do not pay FICA through payroll, but they pay the same money as self-employment tax: 15.3% (12.4% Social Security plus 2.9% Medicare) on 92.35% of net earnings, owed once net earnings reach $400 (IRS Topic 554). In effect, a freelancer pays both the employee and employer halves.

Half of that tax is deductible from income, and the Social Security part stops at the same $184,500 wage base. The self-employment tax rate page explains each step on Schedule SE, and the self-employment tax calculator turns a net profit figure into a dollar estimate.

How payroll tax differs from federal income tax

Payroll tax and income tax are figured on different bases, so a change that lowers one often leaves the other untouched. The comparison below covers the points people most often mix up.

• Brackets and deductions: income tax uses seven brackets from 10% to 37% after the standard deduction; FICA ignores both and taxes gross wages at a flat rate.
• Refunds: income tax withholding is reconciled on Form 1040 and can come back as a refund; FICA is generally final unless too much Social Security tax was withheld.
• 401(k) deferrals: traditional 401(k) contributions lower income tax withholding but are still subject to Social Security and Medicare tax (IRS Publication 15).
• Cafeteria plan benefits: health premiums paid through a section 125 plan are generally excluded from both income tax and FICA wages (IRS Publication 15-B).
• Bonuses: a bonus carries the full 7.65% FICA on top of whatever income tax is withheld; see our page on the bonus tax rate.

Who does not pay FICA tax?

Almost all employees pay FICA, but the law carves out a few groups. The most common exceptions are listed here; each has specific conditions, so check the IRS source for your situation before assuming you are exempt.

• Students employed by the school, college or university where they are enrolled and regularly attending classes.
• Many nonresident aliens in F-1, J-1, M-1 or Q status, for work allowed by their visa (IRS Publication 519).
• Members of certain religious groups who hold an approved exemption, filed on Form 4029.
• Some state and local government employees covered by a public retirement system instead of Social Security (they usually still pay Medicare).

What to do if the FICA on your pay stub looks wrong

1. Check the year-to-date Social Security line. If it exceeds $11,439 for 2026 from one employer, that employer over-withheld.
2. Ask payroll to correct it. IRS Topic 608 says the employer should adjust excess withholding it caused.
3. If the employer will not fix it, file Form 843, Claim for Refund and Request for Abatement, with copies of your Forms W-2.
4. If the excess came from two or more employers, claim it as a credit on Schedule 3 (Form 1040) when you file.
5. If Medicare is less than 1.45% of box 5 wages, ask payroll for a corrected Form W-2c.