What Is FICA?

FICA stands for Federal Insurance Contributions Act — it's the law that funds Social Security and Medicare through payroll taxes. Employees pay 6.2% for Social Security and 1.45% for Medicare; employers match those amounts. Self-employed people pay both sides (15.3%) as self-employment tax. Social Security tax only applies to the first $168,600 of wages in 2024. There's an additional 0.9% Medicare surtax on wages above $200,000 (single) or $250,000 (married).