Salary FYI

FICA (Federal Insurance Contributions Act)

Tax

A US federal payroll tax that funds Social Security and Medicare, split equally between employer and employee at a combined rate of 15.3% on earnings up to the wage base.

## FICA (Federal Insurance Contributions Act)

FICA is the US payroll tax that finances Social Security and Medicare. It is mandatory for virtually all workers and is the largest tax many low- and middle-income earners pay.

### Rates (2025)

| Component | Employee | Employer | Total | Wage Base |
|-----------|----------|----------|-------|----------|
| Social Security | 6.2% | 6.2% | 12.4% | $176,100 |
| Medicare | 1.45% | 1.45% | 2.9% | No limit |
| Additional Medicare | 0.9% | — | 0.9% | Above $200K |

### How It Works

FICA is withheld from every paycheck. Once earnings exceed the Social Security wage base ($176,100 in 2025), Social Security tax stops but Medicare continues indefinitely. High earners pay an additional 0.9% Medicare surcharge.

### Self-Employment

Self-employed individuals pay both halves (15.3%) through Self-Employment Tax. They can deduct the employer-equivalent half (7.65%) from their adjusted gross income.