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What Is FICA on a Paycheck? FICA Tax Defined

Be aware that FICA isn’t one deduction – it’s a mix of Social Safety and Medicare taxes. 

An illustrated mockup of a paycheck outlines where FICA taxes appear on your paycheck.

Social Safety tax 

This tax contributes to the Social Safety program, which acts as a security internet on your retirement. It’s like setting apart a portion of your earnings to make sure monetary stability later in life.

Each employers and staff should withhold 6.2% of their gross earnings for this tax, as much as a most wage base restrict (the utmost quantity of your earnings that’s topic to be taxed). This 12 months, this restrict is $160,200 – that means solely earnings of $160,200 or much less are topic to this tax.¹

Medicare tax

The Medicare tax funds the Medicare program, which gives important well being care protection for these aged 65 and older. It’s your funding in future medical safety. 

Employers and staff are each required to withhold 1.45% of their earnings for Medicare taxes.¹ Whereas the Social Safety tax has an earnings restrict, there isn’t a most wage base for Medicare tax, so all of your earned earnings is topic to this tax.¹ 

Nonetheless, earners who attain a particular earnings threshold (primarily based on submitting standing) also needs to pay attention to the Further Medicare tax. 

That is an additional tax on prime of the usual Medicare tax fee. This 12 months, the Further Medicare tax fee is 0.9% for those who earn greater than $200,000 as a single filer or $250,000 for joint filers.¹

Worker pays: Employer pays: 
Social Safety tax 6.2% (for the primary $160,200) 6.2% (for the primary $160,200)
Medicare tax 1.45%  1.45% 
Whole 7.65%  7.65%
Further Medicare tax 0.9% (for earnings over $200,000 for single filers and $250,000 for joint filers)

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