CashoutGlossary / FICA
FICA
Social Security and Medicare tax on your pay and reported tips: 7.65% from you in 2026, matched by another 7.65% from your employer.
FICA stands for the Federal Insurance Contributions Act, the law behind the Social Security and Medicare taxes on employees' pay. You pay 6.2% for Social Security and 1.45% for Medicare, 7.65% in all, and your employer pays the same again.
The Social Security part stops once your wages and tips for 2026 reach $184,500. Medicare has no wage base limit, and a 0.9% Additional Medicare Tax applies above $200,000 ($250,000 married filing jointly, $125,000 married filing separately). There's no employer match on that extra 0.9%.
For tipped workers, FICA applies to tips too when they total $20 or more in a month. Your employer figures it from the tips you report. When your paycheck is too small to cover it, the shortfall shows on your W-2 in box 12, codes A and B, and you pay it with your return. Tips you never reported get their FICA through Form 4137.
Reported tips also go on your Social Security earnings record, which affects your benefits when you retire or become disabled.
Common mistake: expecting No Tax on Tips to remove FICA. It's an income tax deduction only. Tips are still subject to Social Security and Medicare tax.
Related terms
Self-employment tax · Form 4137 · Form W-2 · Reported tips
