The two-line deduction that funds Social Security and Medicare, explained.
Updated October 2026 with the 2026 wage base.
FICA stands for the Federal Insurance Contributions Act, the law that funds Social Security and Medicare through payroll taxes. It covers two separate programs, and on your pay stub it usually shows up as two lines, often labeled OASDI or SS for Social Security and MED for Medicare.
| Tax | Employee rate | Applies to |
|---|---|---|
| Social Security | 6.2% | Wages up to $184,500 |
| Medicare | 1.45% | All wages |
| Additional Medicare | 0.9% | Wages above $200,000 |
For most workers that adds up to 7.65% of every paycheck. On a $60,000 salary it is $4,590 a year.
Social Security tax is a flat 6.2% of wages, matched by another 6.2% from your employer. The combined 12.4% funds the system, even though only your half appears on your stub.
The tax applies only up to an annual wage base, which is $184,500 for 2026. The most any employee pays for the year is $11,439. Earnings above the wage base are not taxed for Social Security, which is why high earners see this deduction stop partway through the year and their paychecks get larger.
The money pays for retirement benefits, disability insurance and survivor benefits for the family of a worker who has died. It is not a personal savings account. Today's workers fund today's beneficiaries, and your own future benefit is based on your earnings record.
Medicare tax is 1.45% of all wages with no cap, and your employer matches it. It funds hospital insurance for people 65 and older and for some people with disabilities.
High earners pay an Additional Medicare Tax of 0.9%. Your employer starts withholding it once your wages for the year pass $200,000, whatever your filing status. The actual threshold on your tax return is $200,000 for single filers and $250,000 for married couples filing jointly, so any difference is settled when you file. Employers do not match this part.
This is where FICA and income tax differ, and it surprises many people:
That is why a pay stub can show three different wage figures: gross pay, wages subject to income tax and wages subject to FICA. See how to read your paycheck stub for where each one appears.
Federal income tax pays for general government spending and depends on your total income, filing status and deductions. FICA funds two specific programs at a flat percentage. That is why nothing you put on your W-4 changes your FICA withholding, and why there is no refund of it at tax time in the normal case.
Each employer withholds Social Security tax as if it were your only job. If your combined wages pass $184,500, you will have paid more than the $11,439 maximum. You get the excess back as a credit when you file your federal tax return. An employer cannot refund it, because each one withheld correctly on its own wages.
Almost every employee pays it, with a few exceptions. Students working for the college they attend are generally exempt on those wages. Some state and local government employees who are covered by a public pension pay Medicare tax but not Social Security tax. Certain foreign students and scholars on temporary visas are also exempt.
If you are self-employed there is no employer to split the cost with. You pay both halves, 15.3% in total, as self-employment tax on your net earnings. You can deduct half of it when you calculate your income tax.
You earn Social Security credits as you work, up to four a year. In 2026 you earn one credit for each $1,890 of wages, and 40 credits, about ten years of work, qualify you for retirement benefits and for premium-free Medicare hospital coverage at 65.
Sources: Social Security Administration, contribution and benefit base; IRS Topic 751, Social Security and Medicare withholding rates; IRS, Additional Medicare Tax questions and answers.