FICA Taxes
The 7.65% missing from every paycheck before you even see it — the one tax nobody has to file for, because it’s already gone.
What Is It
FICA (the Federal Insurance Contributions Act) funds Social Security and Medicare. Employees pay 6.2% for Social Security and 1.45% for Medicare — 7.65% combined — and the employer matches that with another 7.65% on top, out of sight from the employee. Self-employed people don’t have an employer to split it with, so they pay both halves themselves: 15.3% total, via self-employment tax. Unlike income tax, FICA is withheld on essentially every dollar of wages as they’re earned — there’s no equivalent of a standard deduction or bracket to reduce it.
Why It Matters
Social Security tax has an annual wage cap — for 2026, only the first $184,500 of wages is taxed for Social Security; income above that isn’t subject to the 6.2% at all. Medicare has no cap whatsoever — it applies to every dollar of wages, no matter how high your income climbs. High earners also owe an Additional Medicare Tax of 0.9% on wages above $200,000 (single) or $250,000 (married filing jointly) — separate from, and on top of, the standard 1.45%.
This is a distinct tax from federal income tax entirely — it shows up as its own line on every paystub and funds a specific program, not the general federal budget the way income tax does. That distinction is also why FICA doesn’t care about deductions, retirement contributions, or filing status the way income tax does — it’s calculated straight off gross wages, before any of that comes into play.
Quick Example
Someone earning exactly $184,500 pays the maximum Social Security tax for the year: $184,500 × 6.2% = $11,439. Someone earning $250,000 pays that same capped $11,439 in Social Security tax, plus 1.45% Medicare tax on the full $250,000 ($3,625), plus the 0.9% Additional Medicare Tax on the $50,000 above the $200,000 threshold ($450) — a total FICA-side tax of $15,514, even though their Social Security portion stopped growing at $184,500.
See your own FICA breakdown: