What Are FICA Taxes on Your Paycheck?
When reviewing your paycheck paystub, you will notice dedicated line items labeled FICA OASDI and FICA Med. The Federal Insurance Contributions Act (FICA) is a mandatory federal payroll tax dedicated to funding two cornerstone federal entitlement programs:
- Social Security (Old-Age, Survivors, and Disability Insurance - OASDI)
- Medicare (Hospital Insurance - HI)
Every wage employee and employer in the United States is required to contribute to FICA.
FICA Tax Rates & Annual Wage Caps (2025 / 2026)
| FICA Component | Employee Rate | Employer Match | Self-Employed (SECA) | Annual Wage Cap |
|---|---|---|---|---|
| Social Security (OASDI) | 6.2% | 6.2% | 12.4% | $176,100 (2025) |
| Medicare (HI) | 1.45% | 1.45% | 2.9% | No Limit (All Wages) |
| Additional Medicare Surtax | 0.9% | 0.0% (No match) | 0.9% | Threshold over $200k (Single) / $250k (MFJ) |
How the Social Security Wage Cap Works in Practice
Unlike Medicare or federal income tax, Social Security tax stops being withheld once your cumulative year-to-date earnings exceed the annual statutory wage cap.
Example: High Earner Making $240,000 per Year ($20,000 / month)
- Months 1 through 8 (Cumulative $160,000): You pay 6.2% ($1,240 / month) toward Social Security.
- Month 9 (Hitting the $176,100 Cap): You only pay Social Security tax on the remaining $16,100.
- Months 10 through 12 (Income from $176,101 to $240,000): Social Security withholding drops to $0.00.
- Result: Your monthly take-home paycheck increases by $1,240 every month for the remainder of the calendar year!
The 0.9% Additional Medicare Tax (ACA Provision)
Introduced under the Affordable Care Act (ACA), the Additional Medicare Tax levies an extra 0.9% on earned compensation exceeding statutory thresholds:
- Single Filers & Head of Household: Wages above $200,000
- Married Filing Jointly: Wages above $250,000
- Married Filing Separately: Wages above $125,000
Employers are legally required to begin withholding the additional 0.9% as soon as an individual's pay exceeds $200,000 in a calendar year, regardless of the employee's marital status.
Compute your exact net paycheck and FICA deductions with our US Income Tax Calculator.