Two taxes under one name
FICA is the payroll tax that funds Social Security and Medicare. It comes off every pay cheque before income tax, your employer pays the same amount again on top, and it has a structure most calculators get wrong: one part stops at an annual ceiling, the other never does.
The formula, 2025
Worked example: $60,000 of wages
- Social Security: 6.2% × 60,000 = $3,720
- Medicare: 1.45% × 60,000 = $870
- Employee FICA: $4,590, 7.65% — and the employer pays another $4,590
Why the rate falls as income rises
| Wages | Social Security | Medicare | FICA | Effective rate |
|---|---|---|---|---|
| $60,000 | $3,720 | $870 | $4,590 | 7.65% |
| $120,000 | $7,440 | $1,740 | $9,180 | 7.65% |
| $176,100 | $10,918 | $2,553 | $13,472 | 7.65% |
| $250,000 | $10,918 | $4,075 | $14,993 | 6.00% |
| $400,000 | $10,918 | $7,600 | $18,518 | 4.63% |
Up to the wage base the rate is a flat 7.65%. Above $176,100 Social Security stops and only Medicare continues, so the effective rate drops — FICA is regressive at the top. The 0.9% Additional Medicare Tax above $200,000 is the one piece that rises, and it is employee-only: the employer does not match it.
The self-employed pay both halves
A freelancer owes the employee and employer shares together: 12.4% Social Security to the wage base and 2.9% Medicare on everything, 15.3% in total, on 92.35% of net profit. Half of it is deductible against income tax. On $60,000 of profit that is about $8,478 — nearly double what an employee with the same income sees withheld.
What the wage base does over time
The Social Security ceiling is indexed to average wages: $168,600 in 2024, $176,100 in 2025. Someone earning above it pays the maximum $10,918 in 2025 regardless of how far above. Proposals to lift or remove the cap come up in every Social Security funding debate and would change the table above for the top rows only.
What this calculator leaves out
The employer's matching share, the self-employment version, the Additional Medicare Tax threshold for joint filers ($250,000), and pre-tax deductions such as health premiums under a Section 125 plan, which reduce FICA wages.
Related calculators
- Federal income tax calculator — the larger deduction alongside FICA
- Gross to net calculator — both taxes on one pay cheque
- Hourly to salary — what the same pay looks like as an employee