It's the line item on your pay stub that almost no one questions — and few can define. FICA quietly takes 7.65% of your wages from the first dollar, with no deduction to soften it. Here's exactly where that money goes and why it matters.
What FICA is
FICA — the Federal Insurance Contributions Act — is the payroll tax that funds two programs: Social Security (retirement, disability, survivor benefits) and Medicare (health coverage for those 65+). Unlike income tax, it's not progressive and has no standard deduction.
The 7.65% split
| Program | You pay | Employer pays |
|---|---|---|
| Social Security | 6.2% | 6.2% |
| Medicare | 1.45% | 1.45% |
| Total | 7.65% | 7.65% |
Your employer matches your contribution, so 15.3% total flows to these programs on your behalf.
The Social Security wage cap
Social Security tax only applies up to an annual wage cap ($176,100 in 2025). Earn above it and the 6.2% stops for the rest of the year. Medicare, by contrast, has no cap.
The extra Medicare tax
High earners pay an additional 0.9% Medicare surtax on wages above $200,000 (single). Employers withhold it once you cross the threshold.
Why the self-employed pay double
With no employer to match, self-employed people cover both halves — the 15.3% self-employment tax. They do get to deduct half of it. See the self-employment guide.
Frequently asked questions
What does FICA stand for?
The Federal Insurance Contributions Act. It funds Social Security and Medicare through a payroll tax split between you and your employer.
Can I get out of paying FICA?
For most workers, no — it applies to dollar one of wages with no standard deduction. A few narrow categories (certain students, some government workers) have exceptions.