Finance Maxxing
FICA & Payroll Taxes
FICA Taxes
Social Security and Medicare taxes on wages.
FICA (Federal Insurance Contributions Act) taxes fund Social Security and Medicare. They apply to all wage income.
FICA Rates (2025)
| Component | Employee Rate | Employer Rate | Wage Base |
|---|---|---|---|
| Social Security (OASDI) | 6.2% | 6.2% | $176,100 |
| Medicare | 1.45% | 1.45% | No limit |
| Additional Medicare | 0.9% | — | Above $200K/$250K |
| Total (employee) | 7.65% | — | — |
Key Points
- FICA is a per-earner tax — it applies to each worker individually regardless of filing status
- The Social Security wage cap ($176,100) means high earners pay a lower effective FICA rate
- The Additional Medicare Tax (0.9%) is employee-only — no employer match
- 401(k) contributions do not reduce FICA (only income tax)
- HSA contributions via payroll deduction do reduce FICA
Important: When comparing MFJ vs. Two Singles, exclude FICA — it's identical in both scenarios since it's per-earner.