FICA Tax

Federal Insurance Contributions Act (FICA) taxes are the taxes on wages to fund Social Security and Medicare. The Social Security taxes and Medicare taxes are separate and operate differently. Social Security taxes are 12.4% of an employee’s wages up to a certain amount each year which was $184,500 as of 2026. The tax is split with the employee and employer each paying 6.2%. Medicare taxes are 2.9% on all wages and split 1.45% between employer and employee, but if a person’s wages exceeds $200,000, an extra .9% Medicare tax applies for the employee to pay. If someone is self-employed, they must pay both the individual and employer parts of FICA taxes, but they can deduct the employer portions as business expenses. To calculate federal tax withholdings see: https://www.irs.gov/individuals/tax-withholding-estimator.

[Last reviewed in June of 2026 by the Wex Definitions Team]

Wex

• CIVICS
• benefits law
• social security
• LIFE EVENTS
• employment
• employee benefits
• labor law
• wex definitions
• government
• public benefits
• tax
• health care