Guide · Payroll tax · 2026
How FICA works
FICA is the 7.65% that comes out of almost every paycheck in America, and the tax most people understand least. Here is what the two halves do, where the ceiling sits in 2026, and why your 401(k) does not reduce it.
What FICA actually is
FICA stands for the Federal Insurance Contributions Act. It funds two programs, and both appear as separate lines on a pay stub:
| Program | Employee rate | Employer rate | Applies to |
|---|---|---|---|
| Social Security (OASDI) | 6.2% | 6.2% | Wages up to $184,500 |
| Medicare (HI) | 1.45% | 1.45% | All wages, no ceiling |
| Additional Medicare | 0.9% | — | Wages above $200,000 single / $250,000 joint |
The combined employee rate is 7.65% on wages below the Social Security ceiling, and 2.35% on every dollar above it, plus the 0.9% surcharge for high earners. Your employer pays a matching 6.2% and 1.45% that never appears on your stub — which is why the true cost of employing you is roughly 7.65% higher than your salary.
FICA is not income tax. It is withheld at a flat rate from the first dollar, has no standard deduction, and does not care about filing status until the additional Medicare threshold.
The Social Security ceiling
Social Security tax stops at the contribution and benefit base, which is $184,500 for 2026. Every dollar above that is exempt from the 6.2%. This single threshold is the reason high earners see their effective payroll tax rate fall as salary rises:
| Salary | Social Security | Medicare | Additional | Total FICA | Effective |
|---|---|---|---|---|---|
| $50,000 | $3,100 | $725 | $0 | $3,825 | 7.65% |
| $100,000 | $6,200 | $1,450 | $0 | $7,650 | 7.65% |
| $184,500 | $11,439 | $2,675 | $0 | $14,114 | 7.65% |
| $200,000 | $11,439 | $2,900 | $0 | $14,339 | 7.17% |
| $300,000 | $11,439 | $4,350 | $900 | $16,689 | 5.56% |
The ceiling matters for planning in a specific way: it is per employer, per year. Two jobs that together pay $250,000 will each withhold Social Security as if they were the only job, so you overpay during the year and claim the excess as a credit on your return. One employer paying $250,000 withholds correctly and you get nothing back.
The additional Medicare tax
Above a threshold that depends on filing status, Medicare adds 0.9%:
| Filing status | Threshold |
|---|---|
| Single | $200,000 |
| Head of household | $200,000 |
| Married filing jointly | $250,000 |
| Married filing separately | $125,000 |
Two quirks catch people out. First, employers must withhold the surcharge once an individual's wages pass $200,000 regardless of filing status — a married couple each earning $150,000 will be under-withheld and owe the difference in April. Second, the thresholds are not indexed for inflation, so more taxpayers cross them each year without any raise in real terms.
Why a 401(k) does not reduce FICA
This is the most common misconception on the subject. Traditional 401(k) contributions are excluded from income tax, not from payroll tax. Electing 10% into a 401(k) on a $100,000 salary lowers your federal taxable income by $10,000 — saving $2,200 at the 22% bracket — but your Social Security and Medicare withholding stay exactly the same, because both are calculated on gross wages.
The same is true of a health savings account through a cafeteria plan and most dependent-care accounts: income tax yes, FICA no. Section 125 premiums for employer health insurance are the notable exception — those do reduce FICA wages.
If you are self-employed
Self-employment tax replaces FICA for people with no employer. You pay both halves: 15.3% on 92.35% of net self-employment earnings, with the Social Security portion still capped at the same wage base. Half of the self-employment tax is then deductible against income tax, which softens the blow but does not eliminate it.
The practical consequence is that a freelancer and an employee with the same gross income do not have the same take-home pay, even before benefits. The gap is roughly 7.65% of earnings — the employer half the freelancer must fund personally.
Can you get FICA back?
Generally no. There is no deduction or credit that refunds Social Security and Medicare tax on wages. The narrow exceptions are:
- Excess withholding across multiple employers in the same year, claimed as a credit on the return.
- Nonresident aliens on certain visa categories, where wages may be exempt under a totalization agreement.
- Refund claims on wages never actually paid, or on amounts withheld in error — a Form 843 situation, not a normal return.
Where this fits in your paycheck
FICA is usually the second-largest withholding after federal income tax, and at lower incomes it is often the largest. On $50,000 single, FICA takes $3,825 while federal income tax takes $3,820 — almost exactly the same amount, which is why the two are worth reading together rather than separately.
The take-home calculator applies all of this automatically, including the additional Medicare surcharge and the state layer.
See FICA on your own salary The calculator breaks out Social Security and Medicare as separate lines. Open the calculatorFrequently asked questions
Is FICA the same as income tax?
No. FICA is a flat payroll tax on wages that funds Social Security and Medicare. Income tax is progressive, allows deductions and credits, and depends on filing status and total income.
Do I pay FICA on the full salary?
Social Security stops at $184,500 of wages in 2026. Medicare continues on every dollar, and 0.9% is added above $200,000 for single filers or $250,000 for joint filers.
Why did my Social Security withholding stop in November?
Because you crossed the wage base. Once year-to-date wages pass $184,500, employers stop withholding the 6.2%. Medicare withholding continues on every remaining paycheck.
Does a 401(k) reduce FICA?
No. Pre-tax 401(k) contributions reduce income tax but not Social Security or Medicare, both of which are calculated on gross wages.
Sources
- IRS Publication 15 (2026), Circular E — employer's tax guide, FICA rates
- IRS Topic no. 751 — Social Security and Medicare withholding rates
- Social Security Administration — 2026 contribution and benefit base ($184,500)
- IRS Form 8959 — Additional Medicare Tax
- IRS Schedule SE — self-employment tax computation
Educational information only, not tax advice. Verify rates against the current IRS publications before relying on them.