What FICA stands for and what it funds
FICA stands for the Federal Insurance Contributions Act, the law that establishes the payroll tax funding two federal programs: Social Security (retirement, disability, and survivor benefits) and Medicare (federal health insurance, primarily for people 65+). Unlike federal income tax, which uses progressive brackets, FICA is a flat percentage of wages (with one wage cap and one extra threshold, detailed below) — and unlike income tax, it's assessed on nearly every dollar of wage income from the first dollar earned.
2026 FICA rates
| Tax | Rate | Wage limit |
|---|---|---|
| Social Security | 6.2% | Applies only up to $184,500 of wages (the 2026 wage base); no tax above that amount |
| Medicare | 1.45% | No wage cap — applies to all wages |
| Additional Medicare Tax | +0.9% | Applies only to wages above $200,000 (single/head of household) or $250,000 (married filing jointly) |
Sources: Social Security Administration, 2026 COLA Fact Sheet — ssa.gov ($184,500 wage base for 2026); Internal Revenue Service, Topic no. 751, Social Security and Medicare withholding rates — irs.gov. These are the same figures already cited and used in this site's own paycheck calculator engine.
Why Social Security has a wage cap but Medicare doesn't
Social Security is designed around a capped wage base because the benefit you eventually receive is also capped and calculated from your taxed earnings history — the program isn't meant to tax or pay out on unlimited income. Medicare, by contrast, has no cap on the standard 1.45% because Medicare eligibility and benefits aren't tied to your earnings level the same way, and the tax funds a healthcare trust rather than an earnings-indexed individual benefit.
Worked example: the Additional Medicare Tax in action
Single filer, $220,000 annual gross wages
Here's how FICA breaks down for someone earning above both the Social Security wage base and the Additional Medicare Tax threshold, computed with this site's paycheck engine:
| Social Security (6.2% × capped $184,500, not the full $220,000) | $11,439.00 |
| Medicare (1.45% × full $220,000) | $3,190.00 |
| Additional Medicare Tax (0.9% × $20,000 over the $200,000 threshold) | $180.00 |
| Total FICA | $14,809.00 |
Notice Social Security tax is calculated on only $184,500 of the $220,000 in wages — the remaining $35,500 isn't subject to Social Security tax at all, which is the wage-cap effect in action. Medicare, by contrast, is charged on the full amount, plus the extra 0.9% on the $20,000 above the $200,000 threshold.
Important nuances
- The Additional Medicare Tax is not matched by your employer. Unlike the standard 1.45% Medicare tax (which employers also pay a matching 1.45% on, separately from what's withheld from your paycheck), the extra 0.9% is an employee-only withholding.
- The threshold isn't automatically prorated for multiple jobs. If you have more than one employer, each one calculates the Additional Medicare Tax withholding based only on what they paid you — if your combined income across employers crosses the threshold, you may owe additional tax when you file, since no single employer had visibility into your total income.
- Self-employed individuals pay both the employee and employer portions (self-employment tax) — a different topic from the standard employee FICA withholding covered here.
Frequently asked questions
Does everyone pay the same FICA percentage?
The base rates (6.2% Social Security, 1.45% Medicare) are the same flat percentage for everyone with wage income, regardless of income level — until you hit the wage base cap for Social Security (where the tax stops entirely on income above it) or the Additional Medicare Tax threshold (where an extra 0.9% kicks in on income above it).
Why did my Social Security withholding stop partway through the year?
If your year-to-date wages from a single employer cross the $184,500 wage base, that employer stops withholding Social Security tax for the rest of the year — this is expected and correct, not an error. Medicare withholding continues on all wages since it has no cap.
Is FICA the same as federal income tax?
No — they're separate taxes with different structures. Federal income tax uses progressive brackets, and its rate depends on your total taxable income after deductions. FICA is a flat-rate payroll tax specifically funding Social Security and Medicare, calculated on wages directly. See gross pay vs. net pay for how both fit into your overall paycheck.
Do these rates change every year?
The Social Security wage base is adjusted annually (it's indexed to national average wage growth). The core tax rates (6.2% and 1.45%) have been stable for a long period, but the wage base and the Additional Medicare Tax threshold should be reconfirmed for the specific tax year you're calculating.