FICA stands for the Federal Insurance Contributions Act. These mandatory payroll taxes fund Social Security and Medicare.
Components
| Tax | Employee Rate | Employer Rate | Wage Base (2025) |
|---|---|---|---|
| Social Security | 6.2% | 6.2% | $168,600 |
| Medicare | 1.45% | 1.45% | Unlimited |
| Total | 7.65% | 7.65% | — |
Additional Medicare Tax
High earners pay an extra 0.9% Medicare surtax on income above: - $200,000 (single) - $250,000 (married filing jointly)
Impact on Take-Home Pay
FICA is significant. On a $75,000 salary: - Social Security: $4,650 - Medicare: $1,087.50 - Total FICA: $5,737.50
That's money taken before federal and state income taxes.
Self-Employment
Self-employed individuals pay both the employee AND employer portions (15.3% total), though they can deduct half from gross income.