FICA Taxes Explained: Social Security, Medicare, and the Wage Base
FICA is the federal payroll tax that funds Social Security and Medicare. Every working American pays it from dollar one — and most have no idea how the numbers actually work.
What FICA stands for
Federal Insurance Contributions Act. Two components:
- OASDI — Old-Age, Survivors, and Disability Insurance (Social Security)
- HI — Hospital Insurance (Medicare Part A)
The 7.65% from your paycheck
- 6.2% Social Security on first $168,600 in 2024
- 1.45% Medicare on all wages
Your employer matches every penny, so the government collects 15.3% total on every dollar of wages (up to the SS wage base).
The Social Security wage base
Indexed annually for wage growth. Selected recent years:
| Year | Wage base |
|---|---|
| 2022 | $147,000 |
| 2023 | $160,200 |
| 2024 | $168,600 |
Earn above the base and SS withholding stops for the rest of the year. Medicare continues with no cap.
Additional Medicare for high earners
Extra 0.9% withheld on wages over $200,000 (single) or $250,000 (MFJ). Reconciled on Form 8959 with your return — couples in particular often owe or get refunded here because withholding ignores spouse income.
Self-employed people pay both halves
That's self-employment tax: 15.3% on net SE earnings × 92.35%. Half is deductible above the line. See our SE tax guide.
What FICA buys you
- Future Social Security retirement benefits (need 40 credits, ~10 years of work)
- Disability and survivor benefits
- Medicare Part A at age 65 (premium-free if you have 40 credits)
Run your own numbers
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