Social Security and Medicare tax is a federal payroll tax that funds both programs, charged at 6.2% for Social Security and 1.45% for Medicare on your wages. Your employer withholds that 7.65% from each paycheck and pays a matching 7.65% on top, for a combined 15.3%. If you work for yourself, you pay both halves. These rates are set by federal law, but the amount of earnings subject to Social Security tax changes each year. For 2026, only the first $184,500 in wages counts for the Social Security portion.1Social Security Administration. Contribution and Benefit Base
How the Rates Break Down
Under the Federal Insurance Contributions Act, W-2 workers and their employers each pay into two programs:
- Social Security (OASDI): 6.2% from you, 6.2% from your employer, for 12.4% total.
- Medicare (Hospital Insurance): 1.45% from you, 1.45% from your employer, for 2.9% total.
Your 7.65% share shows up as a line on every pay stub. Your employer deposits the other 7.65% directly to the IRS on your behalf.2Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates
The 2026 Social Security Wage Cap
Social Security tax only applies up to an annual earnings cap. For 2026, that cap is $184,500.1Social Security Administration. Contribution and Benefit Base Once your wages for the year pass that number, neither you nor your employer owes the 6.2% Social Security tax on the excess. Medicare tax has no cap. The 1.45% applies to every dollar you earn.2Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates
The wage base moves each year with the national average wage index. It was $176,100 in 2025, so the 2026 jump means $8,400 more of your earnings gets taxed. For someone earning at or above the cap, that comes out to roughly $521 more in Social Security tax for the year, plus another $521 from the employer.
The Extra 0.9% Medicare Tax on High Earnings
Above the standard 1.45%, high earners pay an Additional Medicare Tax of 0.9%. It applies once your earnings pass a threshold set by your filing status:3Internal Revenue Service. Topic No. 560, Additional Medicare Tax
- Single, head of household, or qualifying surviving spouse: $200,000
- Married filing jointly: $250,000
- Married filing separately: $125,000
The separate-filing threshold catches people off guard. If two spouses each earn $130,000 and file separately, both owe the surtax on $5,000 of income, even though neither would owe anything filing jointly.
Your employer must start withholding the 0.9% once your wages exceed $200,000 in a calendar year, no matter your filing status. So the withholding trigger is always $200,000, even if your true threshold is $250,000 as a joint filer. You reconcile any difference on your tax return. Employers do not match this surtax; the full 0.9% falls on the employee.3Internal Revenue Service. Topic No. 560, Additional Medicare Tax
What Self-Employed Workers Owe
When you work for yourself as a sole proprietor, independent contractor, or general partner, there’s no employer to split the bill. You owe the full 15.3% yourself under the Self-Employment Contributions Act: 12.4% for Social Security and 2.9% for Medicare.4Internal Revenue Service. Topic No. 554, Self-Employment Tax
The tax isn’t calculated on gross revenue. You subtract business expenses to find net profit, then multiply that by 92.35%. That adjustment mimics the tax break W-2 workers get by having their employer cover half of FICA. If your business nets $100,000, you pay self-employment tax on $92,350.4Internal Revenue Service. Topic No. 554, Self-Employment Tax
The $184,500 Social Security wage base still applies. Once your taxable self-employment income (the 92.35% figure) exceeds the cap, you stop paying the 12.4% Social Security portion and owe only the 2.9% Medicare portion on the excess.1Social Security Administration. Contribution and Benefit Base The 0.9% Additional Medicare Tax also applies to self-employment income above the same filing-status thresholds, pushing your total Medicare rate to 3.8% on the top slice of earnings.3Internal Revenue Service. Topic No. 560, Additional Medicare Tax
One consolation: you can deduct half of your self-employment tax when calculating adjusted gross income. This doesn’t reduce the self-employment tax itself, but it lowers the income you owe regular income tax on.4Internal Revenue Service. Topic No. 554, Self-Employment Tax
Paying a Nanny, Housekeeper, or Caregiver
If you pay a household worker $3,000 or more in cash wages during 2026, you become a household employer and owe FICA taxes on those wages.5Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide The rates match any other employment: 6.2% Social Security and 1.45% Medicare from both you and the worker. The $184,500 wage base and Additional Medicare Tax rules apply here too.
You can either withhold the worker’s 7.65% share from their pay or cover it yourself. Either way, you’re on the hook for the total. Household employers don’t file quarterly Form 941. You report everything annually on Schedule H, filed with your personal Form 1040.6Internal Revenue Service. About Schedule H (Form 1040), Household Employment Taxes Many families don’t realize they’ve crossed into employer status until they’ve already missed a year of obligations.
Who Doesn’t Have to Pay
Most workers can’t get out of these taxes, but a few narrow exemptions exist.
Students Working at Their School
If you’re enrolled at least half-time at a college or university and work for that same school, your wages are generally exempt from FICA. The test is whether your educational role is primary and the job is secondary to your studies.7Internal Revenue Service. Student Exception to FICA Tax The exemption doesn’t reach postdoctoral researchers, medical residents, or career employees who happen to take classes. It also generally doesn’t cover work during summer breaks longer than five weeks unless you stay enrolled.
Nonresident Alien Students and Scholars
Foreign students on F-1, J-1, or M-1 visas who qualify as nonresident aliens are exempt from FICA on wages for authorized employment. This exemption typically applies during the first five calendar years in the United States. Once a visa holder becomes a resident alien for tax purposes, the exemption ends and normal FICA withholding starts.8Internal Revenue Service. Foreign Student Liability for Social Security and Medicare Taxes
Certain Religious Workers
Ordained ministers, members of religious orders who haven’t taken a vow of poverty, and Christian Science practitioners can apply for exemption from self-employment tax on ministerial earnings by filing Form 4361 with the IRS. The exemption is available only on religious or conscientious grounds: you must oppose accepting public insurance benefits like Social Security and Medicare for those services. Once granted, it’s generally permanent.
Two Jobs and Overwithheld Social Security
If you hold more than one job, each employer withholds Social Security tax independently based on what they pay you. Neither knows about the other. When your combined wages pass $184,500, the total Social Security tax withheld across all jobs will exceed what you actually owe.
You get the overpayment back by claiming a credit on your income tax return. If total Social Security tax withheld from all employers exceeds 6.2% of $184,500 ($11,439 for 2026), the excess is applied as a credit against your income tax. It doesn’t happen automatically through your employers. You have to claim it when you file. If you only work one job, your employer stops withholding Social Security tax once you hit the cap, so the issue doesn’t come up.
How the Tax Gets Paid
If You’re an Employee
Your employer handles everything: calculating the withholding, deducting it from your pay, and depositing both shares with the IRS. At year end, you receive a Form W-2 showing total wages and the amounts withheld for Social Security and Medicare.9Internal Revenue Service. Topic No. 752, Filing Forms W-2 and W-3 The employer reports total payroll tax liability on Form 941 every quarter.10Internal Revenue Service. About Form 941
If You’re Self-Employed
You calculate your own tax on Schedule SE, filed with your annual Form 1040. Schedule SE is required if your net self-employment earnings are $400 or more.11Internal Revenue Service. Instructions for Schedule SE (Form 1040)
Because no one is withholding taxes for you during the year, you’re expected to make estimated payments each quarter using Form 1040-ES.12Internal Revenue Service. About Form 1040-ES, Estimated Tax for Individuals These payments cover both self-employment tax and income tax. The four deadlines for 2026 are:13Internal Revenue Service. Estimated Tax
- April 15, 2026, for income earned January through March
- June 15, 2026, for income earned April and May
- September 15, 2026, for income earned June through August
- January 15, 2027, for income earned September through December
If a deadline falls on a weekend or federal holiday, the payment is due the next business day.
Penalties for Paying Late
The IRS treats payroll tax deposits seriously, and the penalty scale escalates quickly. Employers who miss FICA deposit deadlines face a tiered penalty:14Office of the Law Revision Counsel. 26 USC 6656 – Failure to Make Deposit of Taxes
- 1 to 5 days late: 2% of the undeposited amount
- 6 to 15 days late: 5%
- More than 15 days late: 10%
- After a delinquency notice or demand for immediate payment: 15%
The bigger risk is the trust fund recovery penalty. Social Security and Medicare taxes withheld from employee paychecks are trust fund taxes; the money belongs to the government the moment it’s withheld. If a business owner, officer, or anyone else with authority over company finances willfully fails to turn those taxes over, the IRS can assess a penalty equal to 100% of the unpaid amount against that person personally.15Office of the Law Revision Counsel. 26 USC 6672 – Failure to Collect and Pay Over Tax, or Attempt to Evade or Defeat Tax The IRS actively pursues these cases, and the personal liability survives even if the business closes or files bankruptcy.
Self-employed workers who underpay their quarterly estimated taxes face a separate penalty based on how much they underpaid and for how long, using IRS interest rates.16Internal Revenue Service. Underpayment of Estimated Tax by Individuals Penalty You can generally avoid the penalty if you owe less than $1,000 at filing time, or if you paid at least 90% of your current-year tax or 100% of your prior-year tax through estimated payments and withholding. That prior-year safe harbor rises to 110% if your adjusted gross income was above $150,000.