What Is FICA?
FICA stands for the Federal Insurance Contributions Act. It mandates payroll taxes that fund two programs: Social Security (officially OASDI — Old Age, Survivors, and Disability Insurance) and Medicare.
Unlike federal income tax, FICA is not progressive — it is a flat rate on wages, split equally between employee and employer.
2026 FICA Rates
| Tax | Employee Rate | Employer Rate | Combined |
|---|---|---|---|
| Social Security | 6.2% | 6.2% | 12.4% |
| Medicare | 1.45% | 1.45% | 2.9% |
| Total FICA | 7.65% | 7.65% | 15.3% |
On a $75,000 salary, employees pay $5,738 in FICA per year ($478/month).
Social Security Wage Base (2026)
Social Security tax only applies up to the wage base limit — $176,100 in 2026. Income above this is exempt from the 6.2% Social Security portion. Medicare has no cap.
This means someone earning $200,000 pays:
- Social Security: 6.2% × $176,100 = $10,918
- Medicare: 1.45% × $200,000 = $2,900
- Total employee FICA: $13,818
Additional Medicare Tax (High Earners)
Earners above $200,000 (single) or $250,000 (married jointly) owe an additional 0.9% Medicare surtax on the excess. This is employee-only — the employer does not match it.
| Income | Standard Medicare | Additional | Total Medicare Rate |
|---|---|---|---|
| $150,000 | 1.45% | 0% | 1.45% |
| $250,000 (single) | 1.45% | 0.9% on $50k | ~1.63% effective |
Self-Employed: You Pay Both Sides
If you are self-employed, you owe both the employee and employer portions — 15.3% on net self-employment income up to the wage base, plus 2.9% Medicare above. However, you can deduct the employer-equivalent half (7.65%) from your taxable income.
A freelancer earning $80,000 net owes approximately $11,304 in self-employment tax — before federal income tax.
Use our Self-Employed Tax Calculator to see the full breakdown, including the deductible half and quarterly payment estimates.
What FICA Funds
Social Security funds retirement benefits (the average monthly benefit is ~$1,900 in 2026), disability insurance, and survivor benefits for dependents of deceased workers. Your eventual benefit is calculated from your 35 highest-earning years.
Medicare funds hospital coverage (Part A) for those 65+, and subsidises Part B (outpatient) and Part D (prescription) premiums. The 1.45% you pay today funds the system for current beneficiaries.