What Are the FICA Limits for Social Security & Medicare?

The Federal Insurance Contributions Act, or FICA, is a U.S. federal payroll tax that funds two major government programs: Social Security and Medicare. Social Security provides retirement, disability, and survivor benefits, while Medicare is a federal health insurance program primarily for individuals aged 65 or older. Funding for these programs comes from mandatory contributions paid by both employees and their employers. These contributions are automatically deducted from an employee’s paycheck, and the employer remits these funds, along with its own matching share, to the government. The specific amounts are governed by rates and income thresholds that can change annually.

The 2025 Social Security Tax Limit

For 2025, the Social Security tax is subject to an annual wage base limit of $176,100. This means that employees only pay Social Security tax on their earnings up to this amount. The purpose of this limit is to cap the amount of earnings used to calculate both contributions and eventual retirement benefits. Any income earned above $176,100 in a calendar year is not subject to this specific tax.

The tax rate for the Social Security component is 6.2% for the employee and is matched by a 6.2% contribution from the employer. For an employee earning $176,100 or more, the total Social Security tax withheld for the year would be $10,918.20. Their employer would also contribute an identical amount on their behalf.

If an employee earns more than the limit, for example $200,000, they will only pay Social Security tax on the first $176,100 of their income. The tax stops being withheld once their year-to-date earnings exceed this threshold. In this scenario, the employee’s total Social Security tax for the year remains at the maximum of $10,918.20.

The 2025 Medicare Tax

The Medicare portion of the FICA tax operates differently from the Social Security component. For 2025, the Medicare tax rate is 1.45% for the employee, with the employer paying a matching 1.45%. This tax is applied to an employee’s gross earnings and is used to fund the nation’s hospital insurance program for seniors and certain disabled individuals.

A significant distinction is that there is no wage base limit for the Medicare tax. This means that all of an employee’s covered wages and earnings are subject to the 1.45% tax, regardless of how high their income is for the year. For example, an individual earning $75,000 would have $1,087.50 withheld for Medicare taxes, while someone earning $300,000 would have $4,350 withheld. In both cases, the employer contributes an equal amount.

Additional Medicare Tax for High Earners

In addition to the standard Medicare tax, a provision under the Affordable Care Act requires high-income earners to pay an Additional Medicare Tax. This surtax is 0.9% and applies to wages and other compensation that exceed certain income thresholds. Unlike the regular FICA taxes, this additional tax is paid only by the employee; there is no employer match.

The income thresholds for the Additional Medicare Tax depend on a taxpayer’s filing status. The tax applies to wages exceeding $200,000 for Single, Head of Household, and Qualifying Widow(er) filers. For those who are Married Filing Jointly, the threshold is $250,000, and for those who are Married Filing Separately, it is $125,000.

Employers are required to begin withholding this 0.9% tax as soon as an employee’s wages for the calendar year surpass the $200,000 single-filer threshold. This withholding is done without regard to the employee’s actual filing status or whether their spouse has income. Taxpayers can use Form 8959, “Additional Medicare Tax,” to calculate and report their liability when they file their annual income tax return.

Considerations for Self-Employed Individuals

Individuals who work for themselves are responsible for paying the full FICA-equivalent tax, known as the Self-Employment Contributions Act (SECA) tax. This tax covers both the employee and employer portions of Social Security and Medicare taxes. For 2025, the SECA tax rate is a combined 15.3% on net earnings from self-employment, composed of a 12.4% component for Social Security and a 2.9% component for Medicare.

The Social Security portion of the SECA tax is subject to the same $176,100 wage base limit that applies to employees. The 2.9% Medicare portion applies to all net self-employment earnings without limit. Self-employed individuals are also subject to the Additional Medicare Tax on earnings that exceed the high-income thresholds.

To account for the employer-equivalent portion of the tax, self-employed individuals are permitted to deduct one-half of their total SECA tax when calculating their adjusted gross income (AGI). This deduction is not an itemized deduction but an above-the-line adjustment to income. This effectively lowers their taxable income, providing a tax benefit similar to the one employers receive for their share of FICA taxes.