What Is FICA Tax and How Does It Affect Your Paycheck?

FICA is a federal payroll tax split into two parts: Social Security and Medicare. Both the employee and employer each pay a portion, though only the employee side reduces your paycheck directly. In 2026, the combined employee FICA rate is 7.65% on most wages — 6.2% for Social Security and 1.45% for Medicare.

Social Security tax is charged at 6.2% of wages, but only up to the Social Security wage base — $184,500 in 2026. This means once your earnings exceed $184,500, Social Security withholding stops for the year. If you earn $200,000, you pay Social Security on the first $184,500 only, not the full amount.

This cap matters for high earners: the effective Social Security burden decreases as a percentage of total income above the wage base.

Medicare tax applies at 1.45% on all wages with no income cap. High earners pay an additional 0.9% Medicare surtax on wages above $200,000 (single filers) or $250,000 (married filing jointly). This means the effective Medicare rate becomes 2.35% above those thresholds.

Unlike the employer-paid portion of FICA, the 0.9% additional Medicare tax is only charged to the employee — employers do not match it.

States like Texas, Florida, and Washington do not tax wage income at the state level. This is a real advantage — but it does not eliminate payroll taxes. FICA is federal and applies everywhere regardless of where you live or work. On a $100,000 salary, FICA reduces take-home pay by roughly $7,650 per year before any federal or state income tax is applied.

This is why comparing two no-income-tax states on take-home pay still produces similar (though not always identical) results — federal and FICA withholding applies to both.

Your pay stub will usually show FICA as two separate line items: "Social Security" (or "OASDI") and "Medicare." Some employers show them combined under "FICA." The employee portions reduce your gross pay before your net paycheck is calculated.

Note that your employer pays a matching amount of FICA on your behalf, which does not come out of your paycheck but does affect the total payroll cost of hiring you.

The UsefulTax calculator applies the 2026 FICA rates automatically: 6.2% Social Security up to the $184,500 wage base and 1.45% Medicare on all wages (plus the 0.9% surcharge on applicable high incomes). This means even if you select a no-income-tax state, FICA is still included in the estimate — which reflects how a real paycheck would be structured.