Look at any pay stub and you'll see a line item for "FICA" or two separate lines for "Social Security" and "Medicare." These taxes come out of every single paycheck for most workers, no matter your filing status or deductions. Here's what they are and how they work.
What Does FICA Stand For?
FICA stands for the Federal Insurance Contributions Act. It's the law that requires both employees and employers to pay into Social Security and Medicare — two federal programs that provide retirement income, disability benefits, and health coverage for older Americans.
The Two Parts of FICA
Social Security Tax: 6.2%
You pay 6.2% of your gross wages toward Social Security — and your employer pays another 6.2% on your behalf. In 2025, this tax only applies to the first $176,100 of wages (called the wage base). Once your earnings exceed that threshold for the year, Social Security tax stops for the rest of the year.
Medicare Tax: 1.45%
You pay 1.45% of all wages for Medicare, and your employer matches it. Unlike Social Security, there is no wage cap — Medicare tax applies to every dollar you earn.
How Much Will You Pay in 2025?
| Annual Salary | Social Security Tax | Medicare Tax | Total FICA |
|---|---|---|---|
| $40,000 | $2,480 | $580 | $3,060 |
| $75,000 | $4,650 | $1,088 | $5,738 |
| $100,000 | $6,200 | $1,450 | $7,650 |
| $176,100+ | $10,918 (max) | $2,553+ | $13,471+ |
The Additional Medicare Tax
High earners pay an extra 0.9% Medicare surtax on wages above $200,000 (single) or $250,000 (married filing jointly). Employers don't match this additional tax — it's only on the employee side.
Self-employed? You pay both the employee and employer share — that's 15.3% total (12.4% Social Security + 2.9% Medicare). However, you can deduct half of self-employment tax on your income tax return.
Can You Avoid FICA Tax?
For most workers, no. FICA taxes are mandatory and come out before you see your paycheck. A few limited exemptions exist for certain religious groups, student workers, and some government employees under alternative pension plans.
One legitimate strategy: pre-tax 401(k) contributions reduce your federal income tax but do not reduce FICA taxes. FICA is always calculated on gross wages.
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