FICA Tax Guide 2026
Data Notice: Figures, rates, and statistics cited in this article are based on the most recent available data at time of writing and may reflect projections or prior-year figures. Always verify current numbers with official sources before making financial, medical, or educational decisions.
FICA Tax Guide 2026
Tax information is for educational purposes only and does not constitute tax advice. Consult a licensed tax professional for your specific situation.
FICA stands for the Federal Insurance Contributions Act, and it is the payroll tax that funds Social Security and Medicare. Nearly every worker in the United States pays FICA taxes, whether through payroll withholding as an employee or through self-employment tax as a sole proprietor or independent contractor. For 2026, the combined employee-employer FICA rate is ~15.30% on wages up to the Social Security wage base, with the Medicare portion continuing uncapped. This guide covers the rates, wage bases, special rules, and strategies for managing FICA taxes.
FICA Tax Rates (2026)
Employee and Employer Shares
| Component | Employee Rate | Employer Rate | Total | Wage Base |
|---|---|---|---|---|
| Social Security (OASDI) | ~6.20% | ~6.20% | ~12.40% | ~$176,100 |
| Medicare (HI) | ~1.45% | ~1.45% | ~2.90% | No cap |
| Additional Medicare | ~0.90% | 0% | ~0.90% | Over ~$200,000 (single) |
| Total FICA | ~7.65% | ~7.65% | ~15.30% | — |
Self-Employment Tax (SECA)
| Component | Rate | Base |
|---|---|---|
| Social Security | ~12.40% | ~92.35% of net self-employment income, up to ~$176,100 |
| Medicare | ~2.90% | ~92.35% of all net self-employment income |
| Additional Medicare | ~0.90% | Net earnings over ~$200,000 (single) or ~$250,000 (joint) |
| Deductible portion | ~50% of SECA tax | Above-the-line deduction on Form 1040 |
How FICA Taxes Work
Social Security Tax
The Social Security portion of FICA funds Old-Age, Survivors, and Disability Insurance (OASDI). Both employees and employers pay ~6.20% on wages up to the annual wage base of ~$176,100. Once an employee’s wages exceed this threshold, no further Social Security tax is withheld for the remainder of the year.
If you work for multiple employers and your combined wages exceed ~$176,100, excess Social Security tax withheld is refunded when you file your income tax return.
Medicare Tax
The Medicare portion funds Hospital Insurance (HI) and has no wage base cap. Both employees and employers pay ~1.45% on all wages, regardless of amount.
Additional Medicare Tax
Since 2013, an additional ~0.90% Medicare tax applies to employees earning over ~$200,000 (single filers), ~$250,000 (married filing jointly), or ~$125,000 (married filing separately). This additional tax is paid only by the employee — the employer does not match it. Employers begin withholding the additional ~0.90% once wages exceed ~$200,000 in a calendar year, regardless of filing status.
Self-Employment Tax
Self-employed individuals pay the combined employer and employee shares of FICA, known as self-employment tax (SECA). The SECA tax is calculated on ~92.35% of net self-employment earnings (reflecting the employer-equivalent portion). Self-employed individuals can deduct ~50% of their SECA tax as an above-the-line deduction on their income tax return.
What Wages Are Subject to FICA
Most forms of employee compensation are subject to FICA, including:
- Salary and hourly wages
- Bonuses and commissions
- Taxable fringe benefits
- Tips (reported and allocated)
- Vacation and sick pay
Certain payments are exempt from FICA:
- Employer contributions to qualified retirement plans
- Employer-provided health insurance premiums
- Employer HSA contributions
- Workers’ compensation payments
- Certain dependent care benefits (up to the exclusion limit)
Social Security Wage Base History
| Year | Wage Base |
|---|---|
| 2022 | ~$147,000 |
| 2023 | ~$160,200 |
| 2024 | ~$168,600 |
| 2025 | ~$172,200 |
| 2026 | ~$176,100 |
The wage base is adjusted annually based on changes in the national average wage index.
Comparison: FICA vs. Self-Employment Tax
| Feature | FICA (Employees) | SECA (Self-Employed) |
|---|---|---|
| Social Security rate | ~6.20% (employee) + ~6.20% (employer) | ~12.40% on ~92.35% of net earnings |
| Medicare rate | ~1.45% + ~1.45% | ~2.90% on ~92.35% of net earnings |
| Additional Medicare | ~0.90% on wages over ~$200K | ~0.90% on earnings over ~$200K |
| Who pays | Split between employee and employer | Self-employed pays full amount |
| Deductibility | Employer share deductible by employer | ~50% deductible on individual return |
Tips for Managing FICA Tax
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Monitor the wage base. Track your year-to-date earnings to know when Social Security withholding will stop at ~$176,100.
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Claim overpaid Social Security tax. If you have multiple employers and combined wages exceed ~$176,100, claim the excess withholding as a credit on your Form 1040.
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Self-employed: deduct half your SECA tax. This above-the-line deduction reduces your adjusted gross income and is available regardless of whether you itemize.
-
Consider an S-corporation election. Self-employed individuals with substantial earnings may reduce SECA tax by electing S-corp status and paying themselves a reasonable salary while taking remaining profits as distributions not subject to SECA.
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Plan for the Additional Medicare Tax. If your income approaches ~$200,000 (single) or ~$250,000 (joint), the extra ~0.90% applies to earnings above the threshold.
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Maximize exempt compensation. Employer contributions to retirement plans, HSAs, and health insurance are not subject to FICA, effectively reducing the tax base.
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Keep accurate records. Self-employed individuals should track all income and expenses carefully to calculate the correct SECA base.
Key Takeaways
- FICA tax funds Social Security (~6.20% each for employee and employer) and Medicare (~1.45% each) on wages up to ~$176,100 (Social Security) with no cap (Medicare).
- An additional ~0.90% Medicare tax applies to high earners above ~$200,000 (single).
- Self-employed individuals pay both shares (~15.30%) but can deduct ~50% as an above-the-line deduction.
- The Social Security wage base increases annually based on wage growth.
- Certain employer-provided benefits (health insurance, retirement contributions) are exempt from FICA.
- Multi-employer workers can claim a refund for excess Social Security withholding.
Next Steps
- Federal Income Tax Guide 2026 — How FICA interacts with your income tax return.
- Self-Employment Tax Guide — Detailed guide for self-employed FICA obligations.
- State Income Tax Rates Comparison 2026 — State taxes on top of FICA.
- Tax Bracket Calculator — Calculate your total federal tax burden.
- Find a CPA Near You — Get help with payroll and FICA compliance.