For a full comparison of how FICA applies differently to employees versus independent contractors, see the W-2 vs 1099 guide.
Your FICA deductions appear as separate line items on every paycheck. The how to read a pay stub guide shows exactly where Social Security and Medicare appear and what each code means.
What Is FICA Tax? 2026 Rates, Definition and How It Works
FICA stands for the Federal Insurance Contributions Act: the law that requires payroll taxes to fund Social Security and Medicare. Complete 2026 guide: what FICA means, every rate, the $184,500 wage base, OASDI on your pay stub, employer match, self-employment SECA, and who is exempt.
What Does FICA Stand For?
FICA stands for the Federal Insurance Contributions Act, a federal law enacted in 1935. Understanding what is FICA on your paycheck and the FICA tax meaning helps clarify why 7.65% disappears from every paycheck before you see it. FICA mandates payroll taxes withheld from every employee's paycheck to fund two federal programs: Social Security and Medicare. The FICA tax definition on your pay stub breaks into two separate line items: OASDI (Social Security) and Medicare Tax: both of which appear every pay period throughout your working life.
FICA Tax: 2026 Quick Reference
Source: IRS Publication 15 & SSA COLA Announcement. Self-employed pay 15.3% under SECA on 92.35% of net earnings.
FICA Tax Rate 2026: Complete Breakdown
The FICA tax rate has two components for every W-2 employee. Both are mandatory, both are calculated on gross wages, and both appear separately on your pay stub. The Social Security portion has a wage cap; Medicare does not.
| FICA component | Employee rate | Employer rate | Combined | 2026 wage cap | Pay stub label |
|---|---|---|---|---|---|
| Social Security (OASDI) | 6.2% | 6.2% | 12.4% | $184,500 | OASDI, SS Tax, Social Security, Soc Sec |
| Medicare (HI) | 1.45% | 1.45% | 2.9% | No cap | MED, Medicare Tax, Medicare |
| Additional Medicare Tax | 0.9% | 0% | 0.9% | Above $200,000 (single) | Add'l Medicare, Medicare Surtax |
| Total FICA (below $184,500) | 7.65% | 7.65% | 15.3% | , | , |
| Tax component | Maximum employee tax | Maximum employer tax | Calculation |
|---|---|---|---|
| Social Security (OASDI) | $11,439.00 | $11,439.00 | $184,500 × 6.2% |
| Medicare (no cap) | No maximum | No maximum | All wages × 1.45% |
| Additional Medicare Tax | No maximum | $0 (employee only) | Wages above $200,000 × 0.9% |
What Is OASDI on My Paycheck?
OASDI stands for Old-Age, Survivors, and Disability Insurance: the formal name for the Social Security tax. When you see OASDI, SS Tax, or Social Security on your pay stub, it is the same deduction: 6.2% of gross wages up to the $184,500 annual wage base.
OASDI: Social Security Tax
MED: Medicare Tax
FICA calculation: $72,500 annual salary, biweekly pay ($2,788.46/period)
The FICA Wage Base 2026: $184,500 and What Happens When You Hit It
One of the most misunderstood FICA facts: once your year-to-date gross wages exceed $184,500, your employer must stop withholding the 6.2% Social Security (OASDI) tax for the rest of that calendar year. This creates a noticeable increase in take-home pay for higher earners typically in October to December.
| Period | YTD wages | SS withheld this period | Status |
|---|---|---|---|
| Jan to Sep (18 pay periods) | $0 → $138,462 | $479.82/period | SS withheld at 6.2% |
| Period 19 (partial) | $138,462 → $184,500 | Partial withholding | Crosses wage base |
| Period 20 onward (Oct to Dec) | Above $184,500 | $0 SS withheld | SS withholding stops |
| Medicare: all periods | All wages | $289.42/period (1.45%) | Never stops |
FICA for W-2 Employees vs Self-Employed Workers
The biggest FICA difference between employment types: W-2 employees pay only half of FICA (7.65%) while their employer covers the other half invisibly. Self-employed workers: freelancers, contractors, sole proprietors: pay both halves under the Self-Employment Contributions Act (SECA) at a combined 15.3% rate.
| Tax element | W-2 employee | Self-employed (SECA) | Difference |
|---|---|---|---|
| Taxable base | $80,000 gross wages | $73,880 (× 92.35%) | SE adjusted for employer equivalent |
| Social Security (employee portion) | $4,960 | $9,161 (full 12.4%) | SE pays both halves |
| Medicare (employee portion) | $1,160 | $2,143 (full 2.9%) | SE pays both halves |
| Employer match (SS + Medicare) | $6,120 (paid by employer) | $0 (no employer) | W-2 employer covers this |
| Total FICA employee out-of-pocket | $6,120 | $11,304 SE tax | $5,184 more for SE |
| 50% SE deduction (reduces income tax) | N/A | −$5,652 from AGI | Partial offset |
The self-employed worker pays $5,184 more in FICA out-of-pocket than an equivalent W-2 employee. The 50% SE tax deduction ($5,652 off AGI) offsets approximately $1,243 in income tax at the 22% marginal rate: but the self-employed worker still pays roughly $3,941 more in total tax burden than the W-2 employee at the same net income level. This is the primary reason many freelancers eventually elect S-Corporation status. Use the self-employment tax calculator for your exact SE tax amount.
What FICA Tax Funds: Where Your Money Goes
FICA taxes do not go into a general government fund. They are deposited into specific trust funds that pay specific benefits. Understanding what your FICA deduction actually funds clarifies why it is structured differently from federal income tax.
| FICA component | Trust fund | What it pays for | Who receives benefits |
|---|---|---|---|
| Social Security (6.2% OASDI) | OASI Trust Fund + DI Trust Fund | Monthly retirement benefits, survivor benefits, disability benefits | Retired workers (62+), disabled workers, surviving spouses and children |
| Medicare (1.45% HI) | Hospital Insurance (HI) Trust Fund | Medicare Part A: inpatient hospital, skilled nursing facility, hospice, home health | Workers 65+ and certain disabled individuals |
| Additional Medicare Tax (0.9%) | Hospital Insurance (HI) Trust Fund | Same as Medicare above: extra contribution from high earners | Same Medicare Part A beneficiaries |
| Not funded by FICA | , | Medicare Part B (outpatient, doctor visits) and Medicare Part D (prescription drugs) | Funded by premiums + general revenue: not your FICA withholding |
Who Is Exempt from FICA Taxes: Complete List
Most US workers pay FICA on every dollar of wages. However, several specific categories of workers are exempt from some or all FICA taxes. Exemptions depend on worker type, visa status, employer type, and religious status. Employers who fail to apply correct exemptions face penalties; employees who are wrongly charged FICA can claim refunds.
| Exempt category | SS exempt? | Medicare exempt? | Key condition | Trade-off |
|---|---|---|---|---|
| Student employees (enrolled school) | ✅ Yes | ✅ Yes | Working at own enrolled institution, enrolled at least half-time, not more than 32 hrs/week | No SS benefit credits for these wages |
| Nonresident aliens: F-1, J-1, M-1 visas | ✅ Yes | ✅ Yes | Must retain NRA status; exempt first 5 years (students) or 2 years (non-students) | No US SS benefit credits |
| Religious workers: Form 4029 | ✅ Yes | ✅ Yes | Must file Form 4029 and have sincere religious objection to SS | Permanently forfeits all SS and Medicare benefits |
| Children under 18 in parent's business | ✅ Yes | ✅ Yes | Only unincorporated businesses; child must be under 18 | No SS credits earned during these years |
| Children 18 to 21 in parent's household business | ✅ Yes | ❌ No | Domestic service in parent's home | Medicare still applies |
| Government employees (CSRS) | ✅ Yes | ❌ No | State/local employees covered by Civil Service Retirement System hired before 1984 | Covered by CSRS pension instead of SS |
| Railroad workers (RRTA) | ✅ Yes | ❌ No | Covered by Railroad Retirement Tax Act instead of Social Security | Railroad retirement benefits instead of SS |
| Most W-2 employees | ❌ Not exempt | ❌ Not exempt | Standard employment: full FICA applies | Earns SS retirement and Medicare eligibility |
FICA Overpayment: Multiple Jobs and the SS Refund Process
Workers who hold multiple jobs simultaneously or switch employers mid-year sometimes have too much Social Security tax withheld: because each employer independently withholds up to the $184,500 wage base without knowing about the other job. This is not an error by either employer: it is a structural feature of how FICA withholding works.
Overpayment example: two jobs, combined wages exceed $184,500
The $1,271 overpayment is claimed on Form 1040 Schedule 3, Line 11 (Excess Social Security Tax Withheld). It appears as a credit that reduces your tax liability or increases your refund. You cannot claim it directly from either employer: only through your personal tax return. Check your W-2 forms from all employers after year-end to identify if this applies to you.
FICA Tax Reference Table: Maximum FICA Tax 2026 and Annual Deductions by Salary
How much is FICA tax on your specific salary? The table below shows the annual employee FICA deduction at common salary levels. These are the amounts withheld from your paychecks: the employer pays an equal amount separately.
| Annual salary | SS (6.2%) | Medicare (1.45%) | Total FICA | Monthly FICA | Biweekly FICA |
|---|---|---|---|---|---|
| $30,000 | $1,860 | $435 | $2,295 | $191.25 | $88.27 |
| $45,000 | $2,790 | $653 | $3,443 | $286.91 | $132.42 |
| $55,000 | $3,410 | $798 | $4,208 | $350.65 | $161.84 |
| $65,000 | $4,030 | $943 | $4,973 | $414.40 | $191.26 |
| $72,500 (example) | $4,495 | $1,051 | $5,546 | $462.17 | $213.31 |
| $100,000 | $6,200 | $1,450 | $7,650 | $637.50 | $294.23 |
| $150,000 | $9,300 | $2,175 | $11,475 | $956.25 | $441.35 |
| $184,500 (SS cap) | $11,439 | $2,675 | $14,114 | $1,176.17 | $542.84 |
| $250,000 | $11,439 (capped) | $4,325 + $450 add'l | $16,214 | $1,351.17 | $623.62 |
SS = Social Security (OASDI). Medicare includes Additional Medicare Tax (0.9%) on wages above $200,000 for single filers. Source: IRS Publication 15, SSA COLA announcement.
FICA Tax: Frequently Asked Questions
What does FICA stand for?
FICA stands for the Federal Insurance Contributions Act: a 1935 federal law mandating payroll taxes to fund Social Security and Medicare. On your pay stub, FICA appears as two line items: OASDI (Old-Age, Survivors, and Disability Insurance) at 6.2% for Social Security, and Medicare Tax (MED) at 1.45%. Together they equal 7.65% employee FICA on every paycheck. Use the paycheck calculator to see your exact FICA deduction per paycheck.
What is the FICA tax rate for 2026?
The 2026 FICA tax rate is 7.65% for employees: 6.2% Social Security + 1.45% Medicare. Employers pay a matching 7.65%, making the combined rate 15.3%. Social Security (6.2%) applies only to the first $184,500 of wages (the 2026 SSA wage base, up from $176,100 in 2025). Medicare (1.45%) has no cap. Workers earning above $200,000 pay an additional 0.9% Medicare surtax. Self-employed workers pay the full 15.3% under SECA.
What is the FICA wage base for 2026?
The 2026 Social Security wage base is $184,500 per the SSA COLA announcement. Social Security tax (6.2%) is withheld only on the first $184,500 of wages per calendar year: above this amount, OASDI withholding stops. The maximum Social Security tax any employee pays in 2026 is $184,500 × 6.2% = $11,439. Medicare (1.45%) has no wage cap and continues on all wages regardless of amount.
What is OASDI: and what is FICA on my paycheck?
OASDI stands for Old-Age, Survivors, and Disability Insurance: the formal name for Social Security tax. On your pay stub it may appear as OASDI, SS Tax, Soc Sec, or Social Security. The rate is 6.2% of gross wages up to $184,500. OASDI is separate from Medicare (labeled MED). Both together equal your total FICA payroll tax deduction of 7.65%. Your Social Security number is used to track your lifetime earnings and calculate your future SS retirement benefit based on AIME (Average Indexed Monthly Earnings).
Does my employer also pay FICA taxes?
Yes. Employers match every dollar of FICA withheld from employees: 6.2% Social Security and 1.45% Medicare on each employee's wages. This employer match is paid separately and does not appear on your pay stub. The employer does not match the additional 0.9% Medicare surtax on wages above $200,000: that additional tax is employee-only. Total employer FICA cost per worker is $7,650 per $100,000 of wages per year.
How is FICA different for self-employed workers?
Self-employed workers pay both halves of FICA under the Self-Employment Contributions Act (SECA): a combined rate of 15.3% (12.4% SS + 2.9% Medicare) applied to 92.35% of net earnings. On $80,000 net self-employment income, SE tax is approximately $11,304 vs $6,120 for an equivalent W-2 employee: a difference of $5,184. Self-employed workers can deduct 50% of SE tax from AGI, saving income tax but not SE tax. Use the self-employment tax calculator for your exact SE tax.
Who is exempt from FICA taxes?
FICA exemptions include: student employees working at their enrolled institution (enrolled at least half-time); certain nonresident aliens on F-1, J-1, M-1, Q-1 or Q-2 visas; religious workers who file Form 4029 (permanently forfeits SS and Medicare benefits); children under 18 working in a parent's unincorporated business; some state and local government employees covered by CSRS (hired before 1984); and railroad workers covered by the Railroad Retirement Tax Act (RRTA) instead of Social Security.
What happens when you overpay Social Security tax at two jobs?
If combined wages from two employers exceed $184,500, each employer withholds SS independently, causing over-withholding. The overpayment is claimed as a credit on Form 1040 Schedule 3, Line 11 at tax filing: it reduces your tax liability or increases your refund. You cannot claim the refund directly from employers. Check your W-2 Box 4 amounts from all employers to calculate any overpayment before filing.