Federal Insurance Contributions Act (FICA) tax funds Social Security and Medicare. Employees pay 7.65% (6.2% Social Security + 1.45% Medicare) on wages; employers match. Social Security portion applies up to the wage base ($176,100 in 2026); Medicare applies to all wages. High earners pay an additional 0.9% Medicare tax on wages above $200K single / $250K married. Self-employed pay both halves (15.3% total) as self-employment tax. FICA is calculated on gross wages — pre-tax 401k contributions don't reduce FICA (unlike federal income tax). FICA is the most regressive major US tax due to the Social Security wage base cap.
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FICA Tax
August 22, 2026 · Aditya Gupta
Tax
Related terms
Alternative Minimum Tax
Alternative Minimum Tax (AMT) is a parallel tax system designed to ensure high-income taxpayers pay a minimum. Calculate…
American Opportunity Credit
The American Opportunity Credit provides up to $2,500 per student per year for the first four years of…
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The Child Tax Credit (CTC) provides $2,000 per qualifying child under 17, with $1,600 refundable as the Additional…
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