FICA takes 7.65% of every paycheck before you see a dollar - yet most people can't explain what it funds, why it stops mid-year for high earners, or why self-employed workers pay double. This guide covers every line of FICA on your pay stub, the 2026 rate and wage base changes, what OASDI and HI mean, and exactly how much comes out at five different salary levels. Want to see your exact FICA deduction? Use our free paycheck calculator.
What FICA is and what it funds
FICA stands for the Federal Insurance Contributions Act - the 1935 law that created the payroll tax funding Social Security and Medicare. It is not optional and cannot be reduced by your W-4 elections. Every W-2 employee pays it on every paycheck regardless of income, filing status, or deductions.
FICA funds two programs:
| Program | Tax name on pay stub | What it pays for |
|---|---|---|
| Social Security | OASDI, Fed OASDI/EE, SS Tax | Retirement benefits, survivor benefits, disability insurance (SSDI) |
| Medicare | HI, Fed Med/EE, Medicare Tax | Hospital insurance (Part A) for adults 65+, disability, end-stage renal disease |
At moderate income levels, FICA takes more money than federal income tax. A single worker earning $50,000 pays approximately $3,825 in FICA - but only about $2,918 in federal income tax (after the standard deduction). FICA is regressive at the top (the Social Security portion stops at $184,500) but hits middle-income workers proportionally harder than the income tax does.
2026 FICA rates and wage base
| Tax | Employee rate | Employer rate | 2026 wage limit | Max employee tax |
|---|---|---|---|---|
| Social Security (OASDI) | 6.2% | 6.2% | $184,500 | $11,439 |
| Medicare (HI) | 1.45% | 1.45% | No cap | No maximum |
| Additional Medicare | 0.9% | None (employee only) | Above $200k (single) | No maximum |
| Total FICA (most workers) | 7.65% | 7.65% | Up to $184,500 | $14,114.25 |
The 2026 wage base increase: what changed
The Social Security wage base increased by $8,400 from $176,100 (2025) to $184,500 (2026). This is the largest dollar-amount increase in several years, driven by the Social Security Administration's annual wage-growth adjustment. Practical effect: employees earning above $176,100 pay Social Security tax on an extra $8,400 of wages in 2026 - an additional $520.80 in Social Security tax for the year.
Decoding FICA lines on your pay stub
Pay stubs use different abbreviations depending on your employer's payroll system. Here are every common FICA label and what it means:
| Pay stub label | What it means | Rate |
|---|---|---|
| OASDI, Fed OASDI/EE, SS Tax, Social Security | Social Security employee share | 6.2% |
| Medicare, Fed Med/EE, HI, Med Tax | Medicare employee share | 1.45% |
| Add'l Medicare, Addl Med EE | Additional Medicare surtax (high earners only) | 0.9% |
| OASDI/ER, SS-ER (not on your stub) | Employer Social Security match - not deducted from your check | 6.2% |
| Med/ER (not on your stub) | Employer Medicare match - not deducted from your check | 1.45% |
For every dollar of FICA on your pay stub, your employer writes a matching check to the IRS. At $85,000 salary, you pay $6,502 in FICA - and your employer pays another $6,502. That $13,004 combined is what it actually costs your employer to have you on payroll beyond your salary. This is why the "W-2 vs 1099" calculation matters - see the comparison in Section 9.
How FICA is calculated - step by step
FICA is calculated on gross wages before any deductions - including your 401(k) contribution and health insurance premium. Unlike federal income tax, pre-tax deductions do not reduce your FICA base. This is the most common misconception about FICA. Bonuses, commissions, and RSU vesting are subject to full FICA at the same rates - see our how bonuses are taxed guide.
| Step | Calculation | Per paycheck | Annual |
|---|---|---|---|
| 1. Gross per check | $85,000 ÷ 26 | $3,269.23 | $85,000 |
| 2. 401(k) contribution (pre-tax) | Does NOT reduce FICA base | - | - |
| 3. FICA base = gross wages | $3,269.23 | $3,269.23 | $85,000 |
| 4. Social Security (6.2%) | $3,269.23 × 6.2% | −$202.69 | −$5,270 |
| 5. Medicare (1.45%) | $3,269.23 × 1.45% | −$47.40 | −$1,232 |
| Total FICA per check | 6.2% + 1.45% = 7.65% | −$250.09 | −$6,502 |
Key point: If this employee also contributes $1,000/check to a traditional 401(k), the 401(k) reduces their federal income tax base - but not the FICA base. FICA is still calculated on the full $3,269.23 gross, not on $2,269.23.
FICA at 5 salary levels: exact dollar amounts
| Annual salary | Biweekly gross | SS/check (6.2%) | Medicare/check (1.45%) | Total FICA/check | Annual FICA |
|---|---|---|---|---|---|
| $40,000 | $1,538.46 | $95.38 | $22.31 | $117.69 | $3,060 |
| $65,000 | $2,500.00 | $155.00 | $36.25 | $191.25 | $4,972 |
| $85,000 | $3,269.23 | $202.69 | $47.40 | $250.09 | $6,502 |
| $120,000 | $4,615.38 | $286.15 | $66.92 | $353.07 | $9,180 |
| $200,000 | $7,692.31 | $476.92* | $111.54 | $588.46* | $14,114 SS max + Medicare |
*Social Security stops once year-to-date wages reach $184,500 - mid-year for $200k earner. Additional 0.9% Medicare kicks in after $200,000. See sections below for details.
FICA is federal and identical in every state. But your state income tax changes total deductions. Use our calculators to see the full picture: California · Texas · New York · Florida
The mid-year paycheck bump: when Social Security stops
Once your cumulative wages with a single employer cross $184,500 in a calendar year, Social Security withholding stops completely for the rest of the year. Your paycheck increases by exactly 6.2% of each subsequent gross paycheck - a noticeable boost for high earners in the second half of the year.
Biweekly gross: $220,000 ÷ 26 = $8,461.54 per check
$184,500 ÷ $8,461.54 = 21.8 pay periods - Social Security stops mid-way through the 22nd paycheck of the year (around late October).
| Paycheck period | SS withheld | Medicare withheld | Take-home boost |
|---|---|---|---|
| Checks 1-21 (Jan-Oct) | $524.62 | $122.69 | - |
| Check 22 (partial SS) | ~$200 | $122.69 | Partial boost |
| Checks 23-26 (Nov-Dec) | $0 - SS stopped | $122.69 | +$524.62/check |
Four full paychecks with no SS withholding = $2,098 extra take-home in the last two months of the year. This is sometimes called the "FICA bonus" - it's not a bonus, just your Social Security cap being hit.
Each employer withholds Social Security independently. If you work for two employers and earn $120,000 at each ($240,000 combined), each employer withholds Social Security on their $120,000 - even though your combined wages exceed the $184,500 cap. You'll have overpaid Social Security by (($240,000 - $184,500) x 6.2%) = $3,441. Claim this as a credit on Schedule 3, Line 11 of your Form 1040 when you file.
Additional Medicare Tax: the 0.9% surtax for high earners
The Additional Medicare Tax (AMT - not to be confused with Alternative Minimum Tax) is an extra 0.9% on wages and self-employment income above specific thresholds. Unlike regular FICA, there is no employer match - the full 0.9% is the employee's.
| Filing status | Threshold | Rate on amount above threshold |
|---|---|---|
| Single / Head of household | $200,000 | 0.9% |
| Married filing jointly | $250,000 | 0.9% |
| Married filing separately | $125,000 | 0.9% |
| Tax layer | Wages subject | Rate | Annual tax |
|---|---|---|---|
| Social Security | First $184,500 | 6.2% | $11,439 |
| Standard Medicare | All $260,000 | 1.45% | $3,770 |
| Additional Medicare | $260,000 - $200,000 = $60,000 | 0.9% | $540 |
| Total FICA | $15,749 |
The employer is required to begin withholding the extra 0.9% once they pay this employee more than $200,000 in a calendar year, regardless of whether she files jointly or separately. If she files MFJ with a spouse earning $100,000 (combined $360,000 - above the $250,000 MFJ threshold), additional Medicare applies on $110,000 combined - reconciled at filing.
Self-employed FICA: paying the 15.3% full rate
Self-employed individuals don't have an employer to split FICA. They pay both halves through self-employment (SE) tax on Schedule SE - but the IRS provides two offsets to make this equivalent to W-2 treatment.
| Step | Calculation | Amount |
|---|---|---|
| 1. Net self-employment income | From Schedule C | $120,000 |
| 2. SE tax base (92.35% of net) | $120,000 × 92.35% | $110,820 |
| 3. Social Security SE tax (12.4%) | $110,820 × 12.4% (under $184,500 cap) | $13,742 |
| 4. Medicare SE tax (2.9%) | $110,820 × 2.9% | $3,214 |
| Total SE tax | 12.4% + 2.9% = 15.3% | $16,956 |
| 5. Deduction: 50% of SE tax | $16,956 ÷ 2 (reduces AGI) | −$8,478 from gross income |
The 92.35% multiplier exists because W-2 employees don't pay income tax on their employer's FICA match. The 50% deduction in Step 5 is the "employer half" offset - reducing AGI by $8,478, which at a 22% bracket saves $1,865 in income tax. See our self-employed taxes guide for the full financial picture.
W-2 vs 1099: the hidden FICA cost of going independent
When a W-2 employee becomes a 1099 contractor, the most significant financial change - often underestimated - is FICA. The employer's 7.65% match is no longer a cost to the employer; instead, it falls on the contractor. Understanding this is critical when comparing a job offer to a contract rate.
The break-even contract rate - the hourly or annual rate at which a contractor earns the same after-tax income as a W-2 employee - is typically 1.25× to 1.40× the W-2 salary depending on benefit costs. At $85,000 W-2, you need roughly $106,000-$119,000 as a contractor to come out equal. Full analysis in our self-employed taxes guide.
Who is exempt from FICA?
| Who | FICA status | Notes |
|---|---|---|
| Most W-2 employees | Subject to full FICA | No exceptions for income level, filing status, or deductions |
| Self-employed (sole proprietors, LLC members) | Pay SE tax (equivalent) | 15.3% on 92.35% of net income; 50% deductible |
| S-corporation owner-employees | Partial | Only on 'reasonable W-2 salary' - distributions avoid FICA. IRS scrutinizes unreasonably low salaries |
| Certain student workers | Exempt | F-1, J-1, M-1 status students in first 5 calendar years of US residence |
| Railroad workers | Exempt (different tax) | Pay Railroad Retirement Tax Act (RRTA) instead of FICA |
| Some state/local government employees | Partial | Some covered by alternative retirement systems in lieu of Social Security |
| Most religious order members | Can opt out | Qualifying religious orders can file Form 4361 to opt out of SE tax |
| Investment income (dividends, capital gains) | Not subject to FICA | FICA applies to earned income only - not investment returns |
Enter your salary and state to see a full paycheck breakdown - gross pay, FICA, federal income tax, state tax, and your exact take-home. Free, no signup, all 50 states.
Frequently asked questions
What is the FICA tax rate for 2026?
What is the Social Security wage base for 2026?
What does OASDI mean on my pay stub?
Does my 401(k) contribution reduce FICA?
What is the Additional Medicare Tax in 2026?
Does FICA affect my tax refund?
How does FICA work for self-employed workers in 2026?
Sources & methodology
All FICA rates and wage base figures are sourced directly from IRS and SSA publications. This article is for informational purposes only and does not constitute tax or financial advice. Consult a CPA or enrolled agent for situation-specific guidance.
- IRS Topic No. 751: Social Security and Medicare Withholding Rates (2026). irs.gov/taxtopics/tc751
- Social Security Administration: Contribution and Benefit Base 2026 ($184,500). ssa.gov/oact/cola/cbb.html
- IRS Publication 15 (Circular E) - Employer's Tax Guide 2026. irs.gov/pub/irs-pdf/p15.pdf
- IRS Publication 926 - Household Employer's Tax Guide 2026. irs.gov/pub/irs-pdf/p926.pdf
- IRS: Questions and Answers for the Additional Medicare Tax. irs.gov
- IRS Schedule SE - Self-Employment Tax instructions (2026). irs.gov