What Is FICA Tax? 2026 Complete Guide to Social Security and Medicare

FICA stands for the Federal Insurance Contributions Act. It is not a single tax but a pair of payroll taxes that fund two of the United States' largest social insurance programs: Social Security (officially the Old-Age, Survivors, and Disability Insurance program, or OASDI) and Medicare (Hospital Insurance, or HI). Every working American with wage income pays FICA taxes, and most employers match the employee contribution dollar-for-dollar.

FICA taxes are distinct from federal income tax. They are not based on your W-4 filing status, cannot be reduced by most deductions, and do not vary with your income bracket in the same way income taxes do. They appear as two separate line items on every pay stub.

The Social Security tax rate for employees is 6.2% in 2026. Employers match that at 6.2%, for a combined rate of 12.4% total on every dollar of wages up to the annual wage base.

The 2026 Social Security wage base is $184,500. This is the maximum amount of annual wages subject to OASDI tax. Once your cumulative wages for the calendar year exceed $184,500, Social Security withholding stops entirely. The paycheck after you cross the cap will show $0.00 on the Social Security line — and your take-home pay increases by the 6.2% that had been withheld on prior paychecks.

Self-employed individuals pay both the employee and employer share as self-employment (SE) tax — a total of 12.4% on net self-employment income up to $184,500. However, self-employed workers can deduct half of their SE tax (the employer-equivalent share) when calculating adjusted gross income, partially offsetting the cost.

The Medicare tax rate for employees is 1.45%. Employers match that at 1.45% for a combined 2.9%. Unlike Social Security, Medicare has no wage cap — the 1.45% applies to every dollar of wages with no annual ceiling.

An additional 0.9% Additional Medicare Tax applies to wages above $200,000 for single filers (or $250,000 for married filing jointly). This additional tax is employee-only — the employer does not match it. Your employer must begin withholding the additional 0.9% once your wages from that employer cross $200,000, regardless of your household filing situation. If you have multiple jobs or a working spouse and your combined household income crosses the threshold, you may owe additional Medicare Tax at filing that was not withheld during the year.

Almost every American with wage income pays FICA taxes. Key exceptions include:

• Certain student visa holders: F-1 and J-1 nonresident alien students are generally exempt from FICA on their campus employment during the first five years.
• Religious order members: Members of certain religious orders who have taken a vow of poverty may be exempt.
• Some state and local government employees: Workers hired before specific dates in states that opted out of Social Security coverage (such as certain Ohio school districts and some Texas government employees) may contribute to alternative pension plans instead.

Self-employed workers, independent contractors, and business owners are not exempt — they pay the self-employment tax equivalent of FICA (15.3% on the first $184,500, 2.9% above that).

Your pay stub will typically show Social Security and Medicare as separate line items under payroll taxes. Both are calculated on gross wages before income tax deductions but after certain specific exclusions. Importantly, FICA taxes apply to traditional 401k contributions — your pre-tax 401k reduces your income tax withholding but does not reduce FICA. If you contribute $1,000 to your 401k, your federal and state income tax is calculated on your remaining wages, but Social Security and Medicare are still calculated on the full pre-deduction gross wages.

Together, FICA represents 7.65% of gross wages for most workers (6.2% + 1.45%). On a $75,000 annual salary, that is approximately $5,738 per year in employee FICA — with your employer paying an identical $5,738 on top. Use the ExactTakeHome calculator to see the exact FICA amounts for your specific salary and pay frequency.

What percentage is FICA tax in 2026?

In 2026, FICA tax is 7.65% for employees: 6.2% for Social Security (on the first $184,500 of wages) plus 1.45% for Medicare (no wage cap). Employers match the same 7.65%. Self-employed individuals pay the full 15.3% as self-employment tax but can deduct half when calculating adjusted gross income.

Does FICA tax apply to 401k contributions?

Yes. FICA taxes (Social Security and Medicare) apply to traditional 401k contributions even though those contributions reduce federal and state income tax. A $1,000 401k contribution saves federal and state income tax but still has 7.65% in FICA taxes withheld from the gross wages.

When does Social Security tax stop for the year?

Social Security tax stops once your wages reach the annual wage base, which is $184,500 in 2026. After your wages exceed this threshold, you only pay Medicare tax (1.45% plus 0.9% Additional Medicare Tax if applicable) for the remainder of the year.