US Social Security and Medicare Tax — FICA Explained
US FICA Taxes Explained: Social Security Caps and Medicare surtaxes
Every wage earner in the United States notices a recurring deduction on their paycheck labeled "FICA" or split into "SS" and "Med." These represent contributions mandated by the Federal Insurance Contributions Act (FICA). Unlike progressive federal income taxes, FICA payroll taxes apply from your first dollar of earned wage income, with no standard deductions or personal exemptions to shelter your earnings.
This guide provides a detailed breakdown of how FICA taxes are calculated for the 2026 tax year, explaining the Social Security wage cap, Medicare contribution rates, and the high-income Medicare surtax.
The Components of FICA
FICA is composed of two separate payroll taxes that fund different national insurance programs:
1. Social Security Tax (OASDI)
Social Security funds the Old-Age, Survivors, and Disability Insurance program.
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Employee Rate: 6.2% of gross wages.
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Employer Rate: 6.2% of gross wages (paid directly by the employer, matching the employee contribution).
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Wage Cap: For the 2026 tax year, the Social Security tax is capped at a maximum wage base of $184,500. Earnings exceeding this cap are exempt from further Social Security tax for the calendar year.
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Maximum Annual Contribution: The maximum amount an employee can contribute to Social Security in 2026 is:
$$\text{$184,500} \times 6.2% = \text{$11,439.00}$$
2. Medicare Tax
Medicare funds the national health insurance program for seniors and individuals with disabilities.
- Employee Rate: 1.45% of gross wages.
- Employer Rate: 1.45% of gross wages (matched by the employer).
- Wage Cap: Unlike Social Security, there is no wage cap for standard Medicare tax. The 1.45% rate applies to all earned wages, regardless of how much you earn.
The Additional Medicare Surtax (0.9%)
High-income earners are subject to an additional Medicare tax under the provisions of the Affordable Care Act (ACA).
- Rate: An extra 0.9% Medicare tax applies to wages exceeding a specific limit (increasing the total employee Medicare rate to 2.35% on the excess).
- Employer Obligation: Employers do not match the additional 0.9% surtax. It is paid solely by the employee.
- Filing Thresholds: The surtax applies to wages exceeding:
- Single / Head of Household: $200,000
- Married Filing Jointly: $250,000
- Married Filing Separately: $125,000
Summary of 2026 FICA Deductions
| Category | Rate up to $184,500 | Rate $184,501 to $200,000 | Rate above $200,000 (Single) |
|---|---|---|---|
| Social Security | 6.20% | 0.00% | 0.00% |
| Medicare | 1.45% | 1.45% | 2.35% (Includes 0.9% surtax) |
| Total FICA | 7.65% | 1.45% | 2.35% |
Self-Employment Tax (SECA)
If you are self-employed or operate as an independent contractor, you do not have an employer matching your FICA payments. Instead, you pay the Self-Employment Contributions Act (SECA) tax, which is double the standard rate:
- 12.4% for Social Security (up to the $184,500 cap).
- 2.9% for Medicare (with the additional 0.9% surtax applying on high incomes).
- Deduction: You are allowed to deduct the employer-equivalent portion (half of the self-employment tax) when calculating your adjusted gross income for federal income taxes.