FICA and FIT are the two federally required deductions you see on almost every paycheck. FICA, short for the Federal Insurance Contributions Act, funds Social Security and Medicare and takes 7.65% of your gross wages. FIT, or federal income tax withholding, is a running prepayment toward the income tax you’ll settle up on in April. Together they usually account for 20% to 35% of gross pay, depending on how much you earn and how you filled out your W-4.
What FICA Takes From Your Paycheck
FICA has two parts, and they’re withheld at fixed rates rather than based on anything you choose.
Social Security: 6.2%
You pay 6.2% of your gross wages toward Social Security, and your employer pays another 6.2% on top of that, for a combined 12.4%.1Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates The 6.2% only applies up to an annual wage base limit. For 2026, that limit is $184,500.2Social Security Administration. 2026 Cost-of-Living Adjustment (COLA) Fact Sheet Once your year-to-date earnings hit that number, Social Security tax stops coming out for the rest of the calendar year. The cap exists because future Social Security benefits are also capped based on the taxable maximum in each year of your work history.
Medicare: 1.45%, With a Surcharge at Higher Incomes
Medicare withholding is 1.45% of every dollar you earn, with the employer matching another 1.45%.1Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates There’s no wage cap on Medicare tax.
Higher earners pay an extra 0.9% Additional Medicare Tax. Your employer is required to start withholding the extra amount once your wages pass $200,000 in a calendar year, but the actual liability threshold on your return depends on filing status: $250,000 for married filing jointly, $200,000 for single or head of household, and $125,000 for married filing separately.3Internal Revenue Service. Questions and Answers for the Additional Medicare Tax Your employer does not match the 0.9%. If you file jointly and your combined wages fall under $250,000, you can recover the surtax on your return; if your household income runs past the threshold, you may owe more.
Your Combined FICA Rate
For most workers, FICA totals 7.65% of gross wages: 6.2% Social Security plus 1.45% Medicare.1Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates Your employer pays another 7.65% behind the scenes and remits both halves to the IRS each quarter on Form 941.4Internal Revenue Service. Instructions for Form 941 (03/2026) You’ll never see the employer share on your pay stub.
How Federal Income Tax Withholding Is Figured
FIT is not a separate tax from the one you file in April. It’s the same income tax, collected paycheck by paycheck so you don’t get one enormous bill at year-end. What actually comes out depends almost entirely on the Form W-4 you gave your employer.
What Your W-4 Tells Your Employer
Form W-4 conveys three things: your filing status, your expected tax credits, and any adjustments for outside income or extra deductions.5Internal Revenue Service. Form W-4, Employee’s Withholding Certificate Filing status carries the most weight because it sets which tax rates and standard deduction your employer applies. For 2026, the standard deduction is $16,100 single and $32,200 married filing jointly.6Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026, Including Amendments from the One, Big, Beautiful Bill
Step 3 on the W-4 is where you enter expected child tax credits ($2,200 per qualifying child under 17) and credits for other dependents ($500 each). Whatever you claim there directly lowers withholding per pay period. Step 4 handles side income without withholding, deductions beyond the standard deduction, and any flat extra amount you want withheld.5Internal Revenue Service. Form W-4, Employee’s Withholding Certificate
How the Numbers Get Computed
Your employer feeds W-4 data into the IRS’s Publication 15-T withholding tables or equivalent payroll software.7Internal Revenue Service. Publication 15-T (2026), Federal Income Tax Withholding Methods The math annualizes your paycheck, applies the marginal brackets to that projected income, subtracts your claimed credits, and divides the result back down to a per-period amount. The 2026 marginal rates run from 10% on the first $12,400 of taxable income (single) to 37% on income above $640,600 single or $768,700 married filing jointly.6Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026, Including Amendments from the One, Big, Beautiful Bill
Bonuses and Other Supplemental Wages
Bonuses, commissions, and severance are treated as supplemental wages and often use a flat withholding rate rather than the bracket method. In 2026, that rate is 22% on the first $1 million of supplemental wages in the year and 37% on anything above.8Internal Revenue Service. Publication 15 (2026), (Circular E), Employer’s Tax Guide That’s why a bonus check can feel unusually taxed. The final amount you actually owe on it gets sorted out on your return based on your real bracket.
Why the Wages Boxes on Your W-2 Don’t Match
Look at a W-2 side by side and the “Wages, tips, other compensation” box (used for FIT) usually differs from the “Social Security wages” and “Medicare wages” boxes. That’s because pre-tax deductions get treated differently depending on which tax you’re talking about.
Traditional 401(k) contributions are excluded from federal income tax withholding, so they cut your FIT wages. Social Security and Medicare tax still apply to those same dollars.9Internal Revenue Service. Retirement Plan FAQs Regarding Contributions Roth 401(k) contributions are hit by both FICA and FIT because they’re already after-tax.
Benefits offered through a Section 125 cafeteria plan (health insurance premiums, HSA contributions, dependent care FSA contributions) are generally excluded from both FICA and FIT. That’s why cafeteria-plan benefits reduce your total taxes more than a traditional 401(k) contribution of the same size. One exception: employer-provided group-term life coverage above $50,000 stays subject to FICA even when routed through a cafeteria plan.10Internal Revenue Service. FAQs for Government Entities Regarding Cafeteria Plans
If You’re Self-Employed, FICA Becomes SECA
FICA applies to W-2 employees. If you work as an independent contractor or run your own business, there’s no employer to split the payroll tax with you. Instead you pay Self-Employment Contributions Act (SECA) tax, which covers both halves: 12.4% Social Security plus 2.9% Medicare, for 15.3% total on net self-employment earnings.11Internal Revenue Service. Self-Employed Individuals Tax Center The same $184,500 Social Security wage base and the Additional Medicare Tax thresholds apply. You can deduct half of what you pay in SECA as an adjustment to income on Form 1040, without itemizing.12Internal Revenue Service. About Form 1040, U.S. Individual Income Tax Return
Self-employed workers also send their own income tax to the IRS through quarterly estimated payments on Form 1040-ES, due April 15, June 15, September 15, and the following January 15.13Internal Revenue Service. Publication 509 (2026), Tax Calendars
What to Do If Your Withholding Looks Wrong
FICA is on autopilot. You don’t adjust it, and there’s nothing to file for it separately at year-end unless you worked for multiple employers and had Social Security tax withheld on combined wages above $184,500. In that case, you claim the excess as a credit on your Form 1040.12Internal Revenue Service. About Form 1040, U.S. Individual Income Tax Return
FIT is where you have control. Getting married, having a child, picking up freelance work, or losing a large deduction can throw off your withholding fast. Too little withheld and you’ll face a balance due in April plus potential underpayment interest, which for early 2026 runs at 7% in Q1 and 6% in Q2 and adjusts quarterly.14Internal Revenue Service. Quarterly Interest Rates Too much withheld and you’ve given the government an interest-free loan until your refund clears.
The fix is a new W-4. The IRS Tax Withholding Estimator at irs.gov walks you through your situation and tells you exactly what to put on the form.15Internal Revenue Service. Tax Withholding Estimator Fifteen minutes once a year, or after any life change that moves your income or family size, is usually enough to keep April from delivering a surprise.