Payroll taxes
What is FICA?
Federal Insurance Contributions Act
FICA is the federal payroll tax that funds Social Security and Medicare. It is split evenly between employer and employee: each pays 6.2% for Social Security plus 1.45% for Medicare, a 7.65% share apiece. For an employer, FICA is the single largest mandatory tax on a W-2 hire and applies to nearly all cash wages.
The Social Security portion (6.2%) only applies up to an annual wage base, which is $184,500 in 2026. The Medicare portion (1.45%) has no wage cap. Employees earning over $200,000 owe an extra 0.9% Additional Medicare Tax, but employers do not match that surtax.
Example
On a $75,000 salary, an employer owes 6.2% Social Security ($4,650) plus 1.45% Medicare ($1,087.50), for $5,737.50 in employer FICA, the same amount withheld from the employee.