What Is FICA?

FICA (Federal Insurance Contributions Act) is the payroll tax that funds Social Security and Medicare.

Rates

Employees pay 6.2% for Social Security up to an annual wage base, plus 1.45% for Medicare on all wages. High earners pay an additional 0.9% Medicare tax above a threshold.

Why your take-home is lower

FICA is separate from federal income tax withholding, which is why your take-home pay is lower than your gross pay even before income tax.

This guide is educational and does not constitute financial advice.