FICA Explained: Social Security, Medicare, and the 2026 Wage Base
On a US pay stub, separate from federal income tax, you will see FICA (Federal Insurance Contributions Act). It combines Social Security and Medicare taxes, which fund retirement, disability and survivor benefits and health insurance for older adults. This article explains the parts, the 2026 wage base, and the extra tax on high earners.
1. Two parts
- Social Security (OASDI): 6.2% paid by the employee. The employer separately pays another 6.2%.
- Medicare: 1.45% paid by the employee. The employer pays another 1.45%.
The employee's share totals 7.65%. The employer's matching amount does not come out of your pay.
2. Social Security has a wage cap
Social Security tax applies only up to a yearly limit. For 2026 this limit (the contribution and benefit base) is $184,500, according to the Social Security Administration. Wages above it are not subject to Social Security tax. The most an employee pays is $184,500 × 6.2% = $11,439.
The 1.45% Medicare tax has no cap and applies to all wages.
3. Additional Medicare Tax of 0.9%
Wages above a threshold are subject to an extra 0.9% Additional Medicare Tax on the amount over it. The threshold depends on filing status ($200,000 for single, $250,000 for married filing jointly, and so on), and employers begin withholding once your wages for the year pass $200,000 regardless of filing status. Only the employee pays this tax; there is no employer match.
4. Examples
$100,000 salary
- Social Security: 100,000 × 6.2% = $6,200
- Medicare: 100,000 × 1.45% = $1,450
- FICA total: $7,650
$250,000 salary
- Social Security: capped base $184,500 × 6.2% = $11,439
- Medicare: 250,000 × 1.45% = $3,625
- Additional Medicare: (250,000 − 200,000) × 0.9% = $450
- FICA total: $15,514
5. Self-employed people
If you earn income from your own business rather than as an employee, you pay both the employee and employer shares: 12.4% for the Social Security part (same cap) and 2.9% for Medicare. The examples here and our calculator assume a W-2 employee and do not cover self-employment tax.
6. How it differs from federal income tax
FICA applies to gross wages before the standard deduction, while federal income tax applies to taxable income in brackets. See our federal bracket article for the income tax side.
The US take-home pay calculator on this site computes FICA this way.
Sources: SSA Contribution and Benefit Base, IRS Topic 751