What Is FICA?

FICA (Federal Insurance Contributions Act) is the law that requires both employers and employees to contribute to Social Security and Medicare through payroll taxes. Employees pay 6.2% of their wages toward Social Security — up to the annual wage base of $168,600 in 2024 — and 1.45% toward Medicare. Employers match both amounts dollar for dollar, bringing the combined Social Security contribution to 12.4% and the combined Medicare contribution to 2.9%. Self-employed people pay both the employer and employee portions themselves, which is why self-employment tax adds up to 15.3% of net earnings. High earners also face an additional 0.9% Medicare surtax on wages above $200,000 ($250,000 for married couples filing jointly), which only the employee pays — there is no employer match on this extra portion.