FICA stands for the Federal Insurance Contributions Act. It funds Social Security and Medicare and is the second largest deduction from most paychecks after federal income tax.
For 2025, the FICA rates are: Social Security: 6.2% on wages up to $176,100 (the wage base limit). Medicare: 1.45% on all wages with no cap. Additional Medicare Tax: 0.9% on wages above $200,000 (single) or $250,000 (married filing jointly).
Your employer pays an equal amount — 6.2% for Social Security and 1.45% for Medicare — making the total combined rate 15.3%. As an employee, you only see your half deducted from your paycheck.
The Social Security wage base is crucial to understand. Once your earnings exceed $176,100 in 2025, you stop paying the 6.2% Social Security tax on additional income. This means a person earning $176,100 and a person earning $500,000 pay the same amount of Social Security tax: $10,918.
This cap makes FICA a regressive tax — lower and middle-income earners pay a higher effective rate than high earners. Someone earning $50,000 pays 7.65% in FICA on their entire salary, while someone earning $300,000 pays an effective FICA rate of about 5.1%.
The Additional Medicare Tax of 0.9% applies only to the employee. Your employer does not match this additional amount. It kicks in on combined wages and self-employment income above $200,000 for single filers.
FICA taxes fund specific benefits. Social Security taxes fund retirement benefits (you need 40 credits, roughly 10 years of work, to qualify), disability benefits (SSDI), and survivor benefits for your family. Medicare taxes fund hospital insurance (Part A) for those 65 and older.
Use our US take-home pay calculator to see your exact FICA deductions at any salary level.