🏛️ How to Calculate FICA Tax in 2026
Complete Guide to Social Security (6.2%) & Medicare (1.45%) Taxes
📋 Table of Contents
🎯 Key Takeaway
FICA Tax = Social Security (6.2%) + Medicare (1.45%) = 7.65% of gross wages. Both employee and employer pay 7.65% each, for a combined total of 15.3%. The Social Security portion has a wage base cap of $176,100 in 2026.
1. What is FICA Tax?
FICA stands for the Federal Insurance Contributions Act, a federal payroll tax that funds two major social insurance programs:
- Social Security (OASDI) — Old-Age, Survivors, and Disability Insurance
- Medicare (HI) — Hospital Insurance for those 65+ and disabled
💡 FICA Quick Facts
- FICA taxes are split equally between employee and employer
- Combined rate is 15.3% (7.65% + 7.65%)
- Self-employed individuals pay the full 15.3%
- FICA taxes fund retirement, disability, and Medicare benefits
- These taxes are mandatory for most W-2 employees
2. 2026 FICA Tax Rates
| FICA Component | Employee Rate | Employer Rate | Total Rate | Wage Base |
|---|---|---|---|---|
| Social Security | 6.2% | 6.2% | 12.4% | $176,100 |
| Medicare | 1.45% | 1.45% | 2.9% | No limit |
| Total FICA | 7.65% | 7.65% | 15.3% | — |
| Additional Medicare* | 0.9% | 0% | 0.9% | Over $200K |
*Additional Medicare Tax applies to wages over $200,000 (single) or $250,000 (married filing jointly)
3. Social Security vs Medicare
🔵 Social Security Tax
- Rate: 6.2% employee + 6.2% employer
- Wage Base: $176,100 (2026)
- Max Tax: $10,918.20 per person
- Funds: Retirement, survivors, disability
- Benefit Age: 62-67+ for retirement
🟢 Medicare Tax
- Rate: 1.45% employee + 1.45% employer
- Wage Base: No limit (all wages)
- Max Tax: None (unlimited)
- Funds: Hospital insurance (Part A)
- Benefit Age: 65+ (or disabled)
⚠️ 2026 Social Security Wage Base
Once your wages exceed $176,100 in 2026, you stop paying the 6.2% Social Security tax for the rest of the year. However, Medicare tax (1.45%) continues on all wages with no cap. High earners also pay an additional 0.9% Medicare on wages over $200,000.
4. FICA Tax Formulas
4.1 Social Security Tax Formula
📐 Formula: Social Security Tax
Applies to first $176,100 of wages in 2026
4.2 Medicare Tax Formula
📐 Formula: Medicare Tax
No wage limit — applies to all wages
4.3 Total FICA Tax (Employee or Employer)
📐 Formula: Total FICA Tax
Each party (employee and employer) pays 7.65%
4.4 Additional Medicare Tax
📐 Formula: Additional Medicare Tax
Only applies to wages over $200K (single)/$250K (married)
4.5 Maximum Social Security Tax (2026)
📐 Formula: Maximum SS Tax
This is the most any individual pays in Social Security tax per year
5. FICA Tax Calculator 2026
Calculate your FICA taxes including Social Security and Medicare:
6. Worked Examples
Example 1: Standard Employee Salary
📝 Problem
An employee earns $75,000 annually. Calculate the yearly FICA taxes for both employee and employer.
SS Tax = $75,000 × 6.2% = $4,650
Medicare = $75,000 × 1.45% = $1,087.50
Total = $4,650 + $1,087.50 = $5,737.50
Employer FICA = $5,737.50
Combined Total = $5,737.50 × 2 = $11,475
Answer: Employee pays $5,737.50, employer pays $5,737.50. Effective rate: 7.65%.
Example 2: High Earner Hitting SS Cap
📝 Problem
An executive earns $250,000 annually. Calculate FICA taxes, including additional Medicare.
SS Tax = $176,100 × 6.2% = $10,918.20
Medicare = $250,000 × 1.45% = $3,625
Additional = ($250,000 − $200,000) × 0.9% = $50,000 × 0.9%
Additional Medicare = $450
Total = $10,918.20 + $3,625 + $450 = $14,993.20
Answer: Employee pays $14,993.20. Employer pays $14,543.20 (no additional Medicare). Effective rate: 5.99%.
Example 3: Bi-Weekly Paycheck
📝 Problem
Employee's bi-weekly paycheck is $3,500. Calculate FICA for this pay period.
SS = $3,500 × 6.2% = $217
Medicare = $3,500 × 1.45% = $50.75
FICA = $217 + $50.75 = $267.75
Answer: $267.75 deducted from each bi-weekly paycheck for FICA.
7. Self-Employment FICA Tax
Self-employed individuals pay both the employee and employer portions of FICA, called the Self-Employment Tax (SE Tax):
📐 Formula: Self-Employment Tax
The 92.35% adjustment reduces the base to match W-2 treatment
| Component | Rate | Description |
|---|---|---|
| Social Security | 12.4% | On first $176,100 of net earnings |
| Medicare | 2.9% | On all net earnings |
| Total SE Tax | 15.3% | Before 92.35% adjustment |
💡 Self-Employed Deduction
Self-employed individuals can deduct 50% of their SE tax as an above-the-line deduction on their income tax return. This helps offset the fact that they pay both portions.
8. FICA Tax Exemptions
While most workers pay FICA, certain groups are exempt:
- Students working for their school — Under certain conditions
- Some nonprofit employees — Specific religious exemptions
- Foreign government employees — Diplomatic workers
- Non-resident aliens — Students on F-1, J-1, M-1, Q-1 visas
- Certain religious groups — Members who oppose insurance (e.g., Amish)
- State/local government workers — If covered by alternate retirement plan
⚠️ Cannot Opt Out
Most employees and employers cannot opt out of FICA taxes. These are mandatory contributions required by federal law. Failure to withhold and deposit FICA taxes can result in significant penalties.
