Overview of FICA Taxes
Federal Insurance Contributions Act (FICA) taxes consist of:
Social Security taxes, which fund old-age, survivors, and disability insurance (OASDI).
Medicare taxes, which finance hospital insurance (HI).
Both employers and employees are responsible for paying FICA taxes, but the rates vary for Social Security and Medicare.
Social Security and Medicare Withholding Rates
For 2025, the current withholding rates are:
Social Security Tax:
6.2% paid by the employer.
6.2% paid by the employee.
12.4% total contribution.
Medicare Tax:
1.45% paid by the employer.
1.45% paid by the employee.
2.9% total contribution.
✅ Reference: For detailed instructions, refer to Publication 15 (Circular E), Employer's Tax Guide.
Additional Medicare Tax Withholding
In addition to the standard Medicare tax, individuals with higher wages are subject to an Additional Medicare Tax of 0.9% on earnings above a specific threshold.
Thresholds based on filing status:
Single or Head of Household: $200,000
Married Filing Jointly: $250,000
Married Filing Separately: $125,000
Employer responsibility:
Employers must begin withholding the 0.9% Additional Medicare Tax once an employee’s Medicare wages exceed $200,000 in a calendar year, regardless of their filing status.
Withholding continues for the remainder of the year.
Employer match:
Employers do not match the Additional Medicare Tax—this tax is solely the employee's responsibility.
✅ For more information, refer to:
Form 8959 Instructions (Additional Medicare Tax)
Wage Base Limits
Social Security Tax:
Only Social Security tax has a wage base limit, which is the maximum amount of earnings subject to the tax.
For 2025, the wage base limit is $176,100.
Wages above this threshold are not subject to Social Security tax, but Medicare tax still applies.
Medicare Tax:
There is no wage base limit for Medicare tax—all covered wages are subject to Medicare withholding, regardless of the amount.
✅ Reference: For the latest wage base limit and updates, review the "What’s New" section in Publication 15.
✅ Key Takeaways:
FICA Taxes: Include Social Security (OASDI) and Medicare (HI) taxes.
Standard Rates:
Social Security: 6.2% (employer) + 6.2% (employee) = 12.4% total.
Medicare: 1.45% (employer) + 1.45% (employee) = 2.9% total.
Additional Medicare Tax:
0.9% applies to wages over $200,000 (regardless of filing status).
Employers do not match this tax.
Wage Base Limit:
Social Security: $176,100 for 2025.
Medicare: No wage base limit—all wages are taxed.