FICA explained: the employee and employer shares
FICA is the collective name for Social Security and Medicare tax, levied by the Federal Insurance Contributions Act. It is a flat percentage, not an estimate, so unlike income tax it does not depend on your filing status and it does not come back as a refund.
The rates
| Component | Employee | Employer | Employee total |
|---|---|---|---|
| Social Security | 6.20% | 6.20% | 6.20% |
| Medicare | 1.45% | 1.45% | 1.45% |
| Combined | 7.65% | 7.65% | 7.65% |
| Additional Medicare above $200,000 single | 0.90% | none | 0.90% |
Social Security applies only up to a wage base, $184,500 for 2026. Above that the 6.2 per cent stops and only Medicare continues at 1.45 per cent, plus the additional 0.9 per cent over $200,000 for a single filer or $250,000 joint. The employer pays its own matching 6.2 and 1.45 alongside, so the true cost of your salary to the employer is roughly 7.65 per cent higher than your gross, and your total FICA-funded contribution is 15.3 per cent counting both halves.
What FICA buys
Social Security generates the retirement, survivor and disability benefit record. Medicare generates hospital coverage from 65. Both are earned through the record of contributions, which is why under-reported wages cost you two ways: less pay now and a smaller benefit decades later.
Where people go wrong
- Believing FICA is refundable. It is not, except where an employer withheld it wrongly, for example from a student on a valid F-1 in the first five years, or a member of a religious group with an approved exemption.
- Believing a higher salary avoids it. Only the Social Security portion is capped, and only above the wage base.
- Believing the employer half is a benefit. It is a cost the employer bears either way, and it is part of why salary offers to contractors look higher.
Where to check yours
Your annual Social Security statement shows every year of reported wages. An unreported year there is an unfixed problem, and the deadline to correct a misreported year is generally three years, eight months and fifteen days after the year in question.