FICA (Federal Insurance Contributions Act) tax consists of two components: Social Security tax (6.2% on wages up to $176,100) and Medicare tax (1.45% on all wages, no limit).

Total FICA tax = 7.65% for most employees.

Example: $80,000 salary = $4,960 Social Security ($80,000 × 6.2%) + $1,160 Medicare ($80,000 × 1.45%) = $6,120 total FICA tax.

Your employer matches this dollar-for-dollar, contributing another $6,120, making total FICA contributions $12,240.

Self-employed individuals pay both halves (15.3% total) but can deduct the employer-equivalent portion (7.65%) as a business expense.

The 2025 Social Security wage base is $176,100, up from $168,600 in 2024 (4.5% increase).

Only the first $176,100 of your combined wages and self-employment income is subject to the 12.4% Social Security tax (6.2% employee + 6.2% employer).

Maximum Social Security tax = $176,100 × 6.2% = $10,918 per person.

Medicare has no wage base—the 2.9% tax applies to all earnings.

If you have multiple jobs, total wages from all employers count toward the $176,100 limit.

Excess Social Security tax withheld can be claimed as a credit on your tax return (Form 1040, Schedule 3, Line 11).

Additional Medicare Tax is a 0.9% surtax on wages exceeding: $200,000 (single/head of household), $250,000 (married filing jointly), or $125,000 (married filing separately).

Unlike regular Medicare (1.45%), there is NO employer match for this additional tax—employees pay the full 0.9%.

Example: Single filer earning $220,000 pays regular Medicare ($220,000 × 1.45% = $3,190) plus Additional Medicare (($220,000 - $200,000) × 0.9% = $180) = $3,370 total Medicare tax.

Employers withhold Additional Medicare once wages exceed $200,000 in a year, regardless of filing status.

If married filing jointly with combined income over $250,000, you may owe additional tax when filing (use Form 8959).

Self-employed individuals pay both the employee and employer portions of FICA, totaling 15.3% (12.4% Social Security + 2.9% Medicare) on 92.35% of net self-employment income.

This is called Self-Employment (SE) tax.

Example: $60,000 net profit → $60,000 × 0.9235 = $55,410 × 0.153 = $8,478 SE tax.

However, you can deduct half of SE tax ($4,239) as an above-the-line deduction (reduces adjusted gross income).

The Social Security portion still caps at the wage base ($176,100 × 0.9235 = $162,626 max taxable SE income).

If you also have W-2 wages, they count toward the Social Security wage base limit.

Yes, but only for Social Security tax—Medicare tax has no wage base limit, so there's no such thing as "too much" Medicare withholding.

Excess Social Security occurs when: (1) You have multiple employers and combined wages exceed $176,100, or (2) A single employer withheld incorrectly.

Example: Job A withholds $10,918 on $176,100, Job B withholds $3,000 on additional $50,000 = $13,918 total vs $10,918 maximum = $3,000 refundable.

Claim the excess on Form 1040, Schedule 3, Line 11 as a credit against income tax owed.

Employers cannot refund Social Security tax—only the IRS can via your tax return.

Yes, bonuses, commissions, and all other forms of compensation are subject to FICA tax at the same rates as regular wages.

However, they may push you over thresholds: (1) Social Security wage base ($176,100)—amounts above this are exempt from the 6.2% Social Security tax, or (2) Additional Medicare threshold ($200k single/$250k married)—amounts above trigger 0.9% additional tax.

Example: $150,000 salary + $60,000 bonus = $210,000 total.

Social Security tax applies to first $176,100 ($10,918), Medicare applies to all $210,000 ($3,045), Additional Medicare applies to $10,000 over threshold ($90).

Total FICA on bonus = $3,720 Social Security + $870 Medicare + $90 Additional = $4,680 (21.9% effective rate on $60k bonus).