FICA Taxes
FICA (Federal Insurance Contributions Act) taxes fund Social Security and Medicare. Employees pay 7.65% of gross wages — 6.2% for Social Security (up to the wage base) and 1.45% for Medicare — and employers match these contributions.
On a $75,000 salary: SS = $4,650, Medicare = $1,087.50, total FICA = $5,737.50.
FICA is withheld from every paycheck before you see it. For 2025, the Social Security portion (6.2%) applies to wages up to $176,100. The Medicare portion (1.45%) has no cap. High earners pay an additional 0.9% Medicare surtax on wages above $200,000 (single) or $250,000 (married filing jointly).
Self-employed individuals pay self-employment tax at the combined employee + employer rate of 15.3%, though they can deduct half of SE tax from their income taxes.
FICA is separate from federal income tax. Even someone who earns too little to owe income tax still owes FICA, which is why low-income workers can face an effective tax rate above zero even without income tax liability.
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Open calculator →Related terms
- Gross Income
- Gross income is your total income before any taxes, deductions, or withholdings. It is the starting figure used by lenders for DTI calculations and by tax authorities to determine your tax bracket.
- Take-Home Pay
- Take-home pay is the net amount deposited after all payroll taxes and deductions. It is the practical number to use for monthly budgeting and affordability calculations.
- Marginal Tax Rate
- Your marginal tax rate is the rate you pay on the last dollar of income earned — the rate of the highest tax bracket you fall into. It is not the rate applied to your entire income.
- Tax Withholding
- Tax withholding is the amount your employer deducts from each paycheck and remits directly to the IRS on your behalf. It is an advance payment toward your annual tax liability — not an extra tax. If too much is withheld, you get a refund; too little, and you owe at filing.