FICA Tax Explained: Social Security & Medicare Deductions on Your Paycheck

FICA (Federal Insurance Contributions Act) funds Social Security and Medicare. Your employer withholds 7.65% for FICA; they also pay a matching 7.65%.

Social Security withholding is 6.2% on wages up to $168,600 annually. Medicare withholding is 1.45% on all wages, with an extra 0.9% for high earners.

Self-employed workers pay both employee and employer portions (15.3% total) because they don't have an employer to split the cost.

Unlike income tax withholding, FICA amounts are automatic and cannot be reduced by W-4 elections or exemptions.