FICA stands for the Federal Insurance Contributions Act. It is the payroll tax that funds Social Security and Medicare. In 2026, the combined FICA rate is 15.3% of wages, split evenly: employees pay 7.65% and employers pay a matching 7.65%. The Social Security portion (6.2%) applies to the first $184,500 in wages. The Medicare portion (1.45%) applies to all wages with no cap.
If you have ever looked at a paystub and wondered what "FICA" means next to a deduction, this guide explains what it is, how it is calculated, who pays it, and how it connects to the broader types of payroll taxes employers are responsible for.
What does FICA stand for?
FICA stands for the Federal Insurance Contributions Act. Congress passed it in 1935 as part of the Social Security Act. The law requires employers to withhold payroll taxes from employee wages and match those contributions from their own funds. These contributions fund two federal programs: Social Security (officially called OASDI, or Old-Age, Survivors, and Disability Insurance) and Medicare (officially called Hospital Insurance, or HI).
FICA is not a single tax. It is the legal framework that mandates two separate taxes be collected together through payroll. When people say "FICA tax," they are referring to the combined Social Security and Medicare withholding.
What is the FICA tax rate for 2026?
| Component | Employee rate | Employer rate | Combined | 2026 wage base |
|---|---|---|---|---|
| Social Security (OASDI) | 6.2% | 6.2% | 12.4% | $184,500 |
| Medicare (HI) | 1.45% | 1.45% | 2.9% | No cap |
| Additional Medicare | 0.9% | N/A | 0.9% | Over $200,000 |
| Total FICA | 7.65% | 7.65% | 15.3% | See Above |
The rates themselves have not changed in several years. What changes annually is the Social Security wage base. For 2026, that cap increased to $184,500 from $176,100 in 2025, meaning both employees and employers will pay slightly more in total Social Security tax if wages exceed the old cap.
How is FICA tax calculated?
FICA tax is calculated on every paycheck. Here is the process:
- Step 1: Take the employee's gross taxable wages for the pay period.
- Step 2: Multiply by 6.2% for the Social Security portion. If the employee's cumulative year-to-date wages have already exceeded $184,500, skip this step for the remainder of the year.
- Step 3: Multiply gross wages by 1.45% for the Medicare portion. There is no cap.
- Step 4: If the employee's cumulative wages for the year exceed $200,000, withhold an additional 0.9% on wages above that threshold.
- Step 5: The employer pays a matching amount for Social Security (6.2%) and Medicare (1.45%). The employer does not match the Additional Medicare Tax.
Example: employee earning $90,000
Per-paycheck FICA (biweekly, 26 pay periods): $90,000 / 26 = $3,461.54 gross per period. Social Security: $3,461.54 x 6.2% = $214.62. Medicare: $3,461.54 x 1.45% = $50.19. Total employee FICA per paycheck: $264.81. The employer pays an identical $264.81. Since $90,000 is well below the $184,500 wage base, FICA is withheld on every paycheck all year.
What is FICA on my paycheck?
FICA shows up on paystubs under several different labels depending on your payroll software. Common labels include:
- FICA: The combined Social Security + Medicare deduction as a single line. Fed OASDI/EE: The Social Security portion (employee share).
- Fed MED/EE: The Medicare portion (employee share).
- FICA-SS: Social Security component of FICA.
- FICA-MED: Medicare component of FICA.
- Social Security Tax: Plain-language label for the OASDI portion.
- Medicare Tax: Plain-language label for the HI portion.
The "/EE" suffix means "employee." Your employer pays a matching amount that does not appear on your pay statement.
For a deeper look at the Social Security component specifically, see our guide on what is OASDI tax.
How is FICA different from income tax?
FICA and federal income tax are both withheld from paychecks, but they are different taxes that fund different things. FICA is a flat-rate tax (same percentage for everyone up to the wage base) that funds specific programs: Social Security and Medicare. Federal income tax uses progressive brackets (the rate increases as income rises) and funds general government operations.
Another key difference: FICA is a shared cost. Employers match the employee's contribution dollar for dollar. Federal income tax is the employee's sole obligation. The employer handles the mechanics of withholding and depositing it, but the tax itself belongs entirely to the employee.
Both taxes are reported on the same quarterly form (Form 941), but they serve fundamentally different purposes.
What is the FICA limit for 2026?
The FICA "limit" refers to the Social Security wage base. In 2026, that limit is $184,500. Only the first $184,500 of an employee's annual wages are subject to the 6.2% Social Security tax. Wages above that amount are exempt from Social Security withholding for the rest of the year.
There is no limit for Medicare. The 1.45% Medicare tax applies to all wages regardless of how much the employee earns. And the Additional Medicare Tax (0.9%) kicks in once wages exceed $200,000.
The Social Security Administration adjusts the wage base each year based on changes in the national average wage index. For a history of wage base changes, see our OASDI deep-dive.
Do self-employed individuals pay FICA?
Self-employed individuals pay the equivalent of FICA through the Self-Employment Contributions Act (SECA). Because there is no employer to cover the matching half, self-employed workers pay the full 15.3%: 12.4% for Social Security (on the first $184,500 of net self-employment income) plus 2.9% for Medicare (on all net income).
Self-employed individuals can deduct the employer-equivalent half (7.65%) from their adjusted gross income when filing their annual tax return. This deduction reduces income tax liability but does not reduce the self-employment tax itself. It is calculated on Schedule SE and reported on Form 1040.
Who is exempt from FICA tax?
Most U.S. workers pay FICA, but narrow exemptions exist. Members of certain religious groups who have a conscientious objection to Social Security benefits can apply for an exemption using IRS Form 4029. Certain non-resident aliens on F-1, J-1, A, or G visas are exempt. Students employed by the school where they are enrolled may qualify for the student FICA exemption. State and local government employees hired before 1984 who participate in a qualifying public retirement system may be exempt from Social Security (but not Medicare).
Independent contractors classified as 1099 workers do not have FICA withheld by the hiring company. They pay SECA tax on their own when filing their returns.
What are employer FICA obligations?
As an employer, you are responsible for withholding the employee's 7.65% FICA contribution from each paycheck, paying a matching 7.65% from your own funds, and depositing the combined amount with the IRS according to your deposit schedule (monthly or semi-weekly, depending on payroll size). FICA is reported on Form 941, filed quarterly. For specific due dates, see our 2026 payroll tax deadline calendar.
Failure to deposit FICA taxes on time triggers IRS penalties ranging from 2% to 15% depending on how late the deposit is. The trust fund recovery penalty (also called the 100% penalty) can hold responsible individuals personally liable for unpaid employment taxes. This includes officers, directors, and anyone with authority over the company's finances.
For startups setting up payroll for the first time, getting FICA deposits right from the start is essential.
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Frequently asked questions about FICA
What does FICA stand for?
FICA stands for the Federal Insurance Contributions Act. It is the federal law that requires employers and employees to pay payroll taxes to fund Social Security and Medicare.
What is the FICA tax rate for 2026?
The 2026 FICA rate is 7.65% for employees (6.2% Social Security + 1.45% Medicare) and 7.65% for employers, for a combined 15.3%. The Social Security portion applies to the first $184,500 in wages. Medicare applies to all wages with no cap.
Is FICA the same as Social Security?
No. FICA includes both Social Security tax and Medicare tax. Social Security (OASDI) is one of the two components of FICA. Medicare (HI) is the other.
What is FICA on my paycheck?
FICA on your paycheck is the combined deduction for Social Security and Medicare. It may appear as a single "FICA" line or as separate lines labeled "Fed OASDI/EE" (Social Security) and "Fed MED/EE" (Medicare).
Why did my FICA deduction change mid-year?
If your Social Security deduction stopped or decreased, it means your year-to-date wages reached the $184,500 wage base. Social Security withholding stops at the cap. Medicare continues on all wages. If your Medicare deduction increased, you may have crossed the $200,000 threshold where the Additional Medicare Tax (0.9%) begins.
Can I get a FICA refund?
If you work for two or more employers and your combined wages exceed the Social Security wage base ($184,500 in 2026), you may overpay FICA. Each employer withholds independently. You can claim the excess Social Security tax as a credit on Schedule 3 of Form 1040. Medicare overpayments are handled differently since there is no wage cap.
Do employers pay FICA too?
Yes. Employers pay a matching FICA contribution of 7.65% on every employee's wages. The employer does not match the Additional Medicare Tax (0.9%). The employer's FICA cost is a real expense on top of the employee's salary.
