FICA Tax — Definition and What It Means for Your Income
The combined Social Security and Medicare tax, totaling 7.65% for employees.
FICA (Federal Insurance Contributions Act) tax funds Social Security and Medicare. Employees pay 6.2% for Social Security (on income up to an annual cap) and 1.45% for Medicare (on all income), totaling 7.65%. Employers match this amount.
Source: Social Security AdministrationSource: IRS
Why it matters
FICA is a mandatory deduction for nearly all W-2 employees, separate from income tax, and applies regardless of which state you live in.
Example
On a $70,000 salary, FICA tax totals approximately $5,355/year (7.65% of $70,000), deducted automatically from each paycheck.
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FAQ
FICA Tax — FAQ
Is FICA the same as income tax?
No. FICA is separate from federal and state income tax — it specifically funds Social Security and Medicare programs.