What Is FICA Tax? Social Security & Medicare Explained (2026)

If you've ever looked at a US payslip and wondered why a chunk of your wages disappears before income tax is even calculated, FICA tax is the reason. It appears on almost every paycheck in the country, and it's one of the first deductions that shrinks your gross pay into your actual take-home pay.

This guide breaks down exactly what FICA is, what it stands for, the 2026 FICA tax rate, and how it's calculated — with the verified numbers you'll see on your own payslip.

What Is FICA Tax?

FICA tax is the combined payroll tax that funds Social Security and Medicare. The name comes from the law that created it — the Federal Insurance Contributions Act. So when people ask what does FICA stand for, the answer is simply that: Federal Insurance Contributions Act.

The FICA tax meaning, in practical terms, is that a fixed percentage of your wages is withheld to pay into two federal programs: Social Security (retirement, disability, and survivors' benefits) and Medicare (hospital insurance for people 65 and older and some younger people with disabilities). Unlike income tax, which rises as you earn more through progressive brackets, FICA is a flat payroll tax with a single exception for very high earners.

Every US employee sees FICA on their payslip, usually labelled as "FICA," "Social Security," and "Medicare," or sometimes as "OASDI" (Old-Age, Survivors, and Disability Insurance — the formal name for the Social Security portion).

FICA Tax Rate for 2026

The total FICA tax percentage an employee pays is 7.65% of their wages. That breaks down into two parts: 6.2% for Social Security tax and 1.45% for Medicare tax. The Social Security portion has a wage cap; the Medicare portion does not.

Here's the full breakdown of FICA tax rate 2026 figures:

The 7.65% total applies to every dollar you earn up to the Social Security wage base. Above that cap, only the 1.45% Medicare portion continues, plus Additional Medicare Tax if you cross the high-earner threshold.

FICA-OASDI and FICA-MED: Reading FICA on Your Paycheck

Payslips rarely just say "FICA". Most split it into two lines, and the labels vary by payroll provider:

So "FICA med tax" is simply the Medicare part of FICA. "EE" means it's the employee's share; your employer pays a matching amount that doesn't come out of your pay.

How Is FICA Tax Calculated?

To see how is FICA tax calculated in practice, let's work through two examples — one below the Social Security cap and one above it.

Example 1: $100,000 salary (single filer)

On a $100,000 salary, the entire amount is below the $184,500 Social Security wage base, so the full 6.2% applies:

• Social Security tax: 6.2% × $100,000 = $6,200
• Medicare tax: 1.45% × $100,000 = $1,450
• Total FICA: $6,200 + $1,450 = $7,650
• Additional Medicare Tax: $0 (income is below the $200,000 threshold)

So a single filer earning $100,000 pays $7,650 in FICA tax for 2026 — before any federal or state income tax is even considered. That's why understanding FICA is the first step in calculating your true take-home pay.

Example 2: $250,000 salary (single filer)

At $250,000, the salary is above the Social Security wage base, so Social Security tax is capped. Medicare still applies to every dollar, and the additional 0.9% kicks in above $200,000:

• Social Security tax: capped at $11,439.00 (6.2% of $184,500)
• Medicare tax: 1.45% × $250,000 = $3,625
• Additional Medicare Tax: 0.9% × ($250,000 − $200,000) = 0.9% × $50,000 = $450
• Total FICA: $11,439 + $3,625 + $450 = $15,514.00

Notice how the Social Security portion stops growing once wages pass $184,500, but Medicare keeps climbing — and the additional 0.9% adds a further layer for high earners.

The Social Security Wage Base Cap

The FICA tax cap refers specifically to the Social Security wage base — the maximum amount of earnings subject to the 6.2% Social Security tax in a given year. For 2026, that wage base is $184,500.

This means the most Social Security tax any employee will pay in 2026 is 6.2% × $184,500 = $11,439.00. Once your wages exceed $184,500, you stop paying the 6.2% Social Security tax on the excess — those additional dollars are only subject to the 1.45% Medicare portion (and potentially the Additional Medicare Tax).

The wage base is adjusted annually for inflation, so it tends to rise a little each year. Medicare, by contrast, has no cap — every dollar you earn is subject to the 1.45% Medicare tax, regardless of how high your income climbs.

Additional Medicare Tax for High Earners

The Additional Medicare Tax adds a further 0.9% on wages above certain thresholds. It applies only to the employee (employers do not match it). The thresholds depend on your filing status:

• $200,000 for single filers and head of household
• $250,000 for married filing jointly
• $125,000 for married filing separately

So the total Medicare rate for wages above your threshold becomes 1.45% + 0.9% = 2.35%. Employers are required to begin withholding the additional 0.9% once an employee's wages pass $200,000 in a calendar year, regardless of filing status — any reconciliation with your actual threshold happens at tax time.

Who Pays FICA — Employee vs Employer

A common question is who pays FICA tax. The short answer: both you and your employer. The employee pays 7.65% (6.2% Social Security + 1.45% Medicare), and the employer separately matches that with another 6.2% + 1.45% — so the combined FICA cost is 15.3% of wages.

The one exception is the Additional Medicare Tax: the employer does not match the extra 0.9%. That's paid solely by the employee.

Self-employed workers and SECA

If you're self-employed, you pay both halves yourself through the Self-Employment Contributions Act (SECA). That works out to 15.3% total — 12.4% for Social Security (on the same $184,500 wage base) plus 2.9% for Medicare (with no cap). The additional 0.9% still applies above the same thresholds. Half of the self-employment tax is deductible for income tax purposes, which partially offsets the sting of paying both sides.

What Does FICA Tax Fund?

Understanding what does FICA tax fund helps explain why it's mandatory and why it never goes away. The two components support two of the largest federal programs in the United States:

Social Security (6.2%) funds:

• Retirement benefits for workers and their dependents
• Disability benefits for workers who can no longer work
• Survivors' benefits for families of deceased workers

Medicare (1.45%) funds:

• Medicare Part A — hospital insurance for people 65 and older, and some younger people with certain disabilities or conditions

Notably, FICA does not fund Medicare Part B (medical insurance) or Part D (prescription drugs) — those are largely paid through premiums and general revenue. And it does not fund federal or state income tax programs at all; those are separate.

Does a 401(k) Reduce FICA?

No — and this is a detail that catches many people out. Pre-tax 401(k) contributions reduce your federal (and usually state) taxable income, but they do not reduce FICA tax. FICA is charged on your gross wages, including amounts you elect to defer into a 401(k).

For example, if you earn $100,000 and contribute $10,000 to a traditional 401(k), your federal income tax is calculated on $90,000 — but your FICA is still calculated on the full $100,000. The Social Security and Medicare portions are withheld before the 401(k) deduction is applied.

This matters because it means a 401(k) won't lower the FICA line on your payslip, even though it shrinks the income tax line. If you're modelling your take-home pay, make sure your calculator applies FICA to gross wages — our US salary calculator does exactly that.

FICA Wages on Your W-2

Your W-2 shows three different wage figures, and they often don't match. That's normal:

• Box 1, wages for income tax: your pay minus pre-tax 401(k) contributions and pre-tax benefits.
• Box 3, Social Security wages: your pay including 401(k) contributions, but capped at $184,500 for 2026.
• Box 5, Medicare wages: the same as Box 3 but with no cap.

Boxes 3 and 5 are your "FICA wages". They're usually higher than Box 1 because 401(k) contributions are still subject to FICA. Pre-tax health insurance premiums paid through your employer's cafeteria (Section 125) plan are the main thing that lowers FICA wages as well as income-tax wages.

Boxes 4 and 6 show the Social Security and Medicare tax actually withheld. Box 4 should be 6.2% of Box 3, and Box 6 should be 1.45% of Box 5 (plus 0.9% of anything over $200,000).

Overpaid FICA From Two Jobs? You Can Get It Back

Each employer withholds Social Security tax without knowing what your other jobs pay. If your combined wages from two or more employers go over $184,500 in 2026, you'll have paid more than the $11,439 maximum.

You don't lose the extra. Claim the excess Social Security tax as a credit on your federal tax return (Form 1040, via Schedule 3), and it's refunded or reduces the tax you owe. This only applies across different employers. If one employer withholds too much, ask them to correct it.

FICA Tax FAQ

See FICA in Your Take-Home Pay

FICA is the first, most consistent deduction from any US paycheck — a flat 7.65% that applies before income tax brackets even come into play. To see exactly how FICA, federal income tax, and state tax combine on your salary, run your numbers through the US Take-Home Pay Calculator below. It applies the verified 2026 rates, including the $184,500 Social Security wage cap and Additional Medicare Tax, so your take-home estimate matches what you'll actually see on your payslip.

Related tools and guides

• US Take-Home Pay Calculator — see FICA, federal and state tax on your salary
• 2026 Federal Income Tax Brackets Explained — the progressive brackets that apply after FICA
• States With No Income Tax — where FICA may be your only payroll deduction besides federal tax
• How to Calculate Your US Take-Home Pay — the full workflow from gross to net

This article is for general information purposes only and does not constitute tax advice. For advice specific to your situation, consult a qualified tax professional or visit irs.gov.