How much comes out of your paycheck
If you are working, you pay 6.2% of your wages into Social Security and 1.45% into Medicare. Your employer matches both amounts, so the total going to these programs is double what you see on your pay stub. These percentages stay the same whether you earn $30,000 or $300,000 a year.
Social Security has a wage cap — in 2024, you stop paying the 6.2% once you reach $168,600 in annual earnings. Medicare has no cap, so high earners pay 1.45% on every dollar they make. If you are self-employed, you pay both the employee and employer share yourself, which comes to 12.4% for Social Security and 2.9% for Medicare.
These amounts are called FICA taxes (Federal Insurance Contributions Act). They appear on your pay stub as separate line items. You cannot opt out of them if you are working — they are mandatory for nearly all jobs in the United States.
Key Takeaways
- You pay 6.2% of wages to Social Security (capped at $168,600 in 2024) and 1.45% to Medicare with no cap.
- Your employer matches both amounts, so the total contribution is double what leaves your paycheck.
- Self-employed people pay both the employee and employer portions themselves: 12.4% for Social Security and 2.9% for Medicare.
- These taxes fund your future benefits — the amount you paid in affects how much you receive later.
- High earners pay an additional 0.9% Medicare tax on income above $200,000 (single) or $250,000 (married filing jointly).
The wage cap and why it matters
The Social Security wage cap means that once you earn $168,600 in a year, no more of your income goes toward Social Security taxes. If you earn $200,000, you pay the 6.2% only on the first $168,600. This cap changes each year based on average wage growth — it was lower in previous years and will likely be higher in future years.
Medicare has no wage cap at all. You pay 1.45% on every dollar you earn, no matter how much that is. However, there is an additional Medicare tax: if you earn more than $200,000 (or $250,000 if married filing jointly), you pay an extra 0.9% on the amount above that threshold. This extra tax started in 2013 and applies to both employees and self-employed workers.
The wage cap for Social Security is one reason high earners pay a smaller percentage of their total income into the program than middle-income workers do. A person earning $50,000 pays 6.2% on all of it. A person earning $500,000 pays 6.2% only on $168,600, which is about 2% of their total income.
How these taxes fund your benefits
The money you pay into Social Security and Medicare does not sit in an account with your name on it. Instead, current workers' taxes pay for current retirees' benefits. When you retire, future workers' taxes will pay your benefits. This is called a pay-as-you-go system.
Your Social Security benefit amount is based partly on how much you paid in over your working years. The system looks at your 35 highest-earning years and calculates an average. If you paid more into the system, your benefit will be higher. If you worked fewer than 35 years, zeros are counted for the missing years, which lowers your benefit.
Medicare works differently — your Part A (hospital insurance) benefit does not depend on how much you paid in. Everyone who paid Medicare taxes for at least 10 years gets Part A at no monthly cost when they turn 65. Your Part B and Part D premiums are based on your income, not on what you paid in taxes.
What happens if you did not work in the United States
If you worked in another country, those years may not count toward your Social Security or Medicare benefits. However, the United States has totalization agreements with about 30 countries that allow work credits from those countries to count toward your U.S. benefits. Countries with agreements include Canada, the United Kingdom, France, Germany, Japan, and others.
To find out whether your foreign work counts, contact Social Security at 1-800-772-1213 or visit your local Social Security office. You will need to provide documentation of your work history in that country. If you worked in a country without an agreement, those years typically do not count, though there are rare exceptions.
If you are not a U.S. citizen, you may still be able to receive Social Security or Medicare benefits if you have a valid work history in the United States. Immigration status does not automatically disqualify you from benefits you paid into.
Medicare taxes if you are retired or not working
Once you stop working, you no longer pay FICA taxes. However, if you continue to work part-time or in self-employment after you start receiving Social Security, you still pay Social Security and Medicare taxes on that income. There is no age at which you stop paying these taxes — they continue as long as you have earned income.
If you have investment income, rental income, or other non-wage income, you do not pay Social Security or Medicare taxes on it. These taxes explore only to wages and self-employment income. High-income retirees may pay the additional 0.9% Medicare tax on investment income, but this is separate from the standard Medicare tax.
When you turn 65 and enroll in Medicare, you pay premiums for Part B and Part D (if you choose it), but these are not the same as the Medicare taxes you paid while working. Part B and Part D premiums are based on your current income and are deducted from your Social Security check if you receive one.
Understanding your Social Security statement
Your Social Security statement shows how much you have paid into the system over your lifetime. You can view it anytime by creating an account at ssa.gov. The statement lists your earnings year by year and shows an estimate of your future benefits at different ages.
The statement also shows your work credits. You need 40 work credits to receive Social Security retirement benefits (you earn up to 4 credits per year). If you have fewer than 40 credits, you will not be able to receive your own retirement benefit, though you may be able to receive a benefit based on a spouse's or ex-spouse's record.
Review your statement every few years to make sure the earnings record is correct. If you see an error, you can contact Social Security to correct it. Errors are usually caught within a few years, but it is worth checking, especially if you changed jobs or had periods of self-employment.
What to ask your doctor or financial advisor
If you are approaching retirement, ask a financial advisor how your Social Security and Medicare taxes paid over the years affect your benefits. They can help you understand the trade-offs between claiming Social Security early (at 62) versus waiting until your full retirement age or age 70, since waiting increases your monthly benefit.
Ask your doctor or a Medicare counselor whether you need Part B or Part D coverage based on your health and medications. Some retirees delay Part B enrollment if they have employer coverage, but there are penalties for late enrollment, so understanding the rules matters.
If you worked in multiple countries or had gaps in your work history, ask Social Security directly whether your record is complete and accurate. You can reach them at 1-800-772-1213 or visit ssa.gov to set up an account and review your statement.
Frequently Asked Questions
Do I pay Medicare taxes after I turn 65?
If you are still working and earning wages, yes — you pay Medicare taxes on that income for as long as you work. Once you stop working, you no longer pay these taxes. However, you will pay Medicare Part B and Part D premiums if you enroll in those parts of Medicare.
What is the difference between Medicare taxes and Medicare premiums?
Medicare taxes are the 1.45% (or 2.35% if self-employed) you paid while working. Medicare premiums are what you pay monthly after you turn 65 to enroll in Part B (doctor visits) or Part D (prescriptions). Premiums are based on your current income, not on what you paid in taxes.
Can I get back the Medicare and Social Security taxes I paid if I move out of the country?
No. These taxes fund the programs, and you cannot reclaim them. However, you may still be able to receive Social Security benefits if you move abroad, depending on your citizenship and work history. Medicare generally does not cover care outside the United States.
Why does my employer match my Social Security and Medicare taxes?
The law requires employers to match these taxes as part of the cost of employing someone. The matched amount is not part of your wages — it is a separate employer expense. Both the employee and employer portions go into the same Social Security and Medicare trust funds.
If I did not work 35 years, will I get a lower Social Security benefit?
Yes. Social Security calculates your benefit using your 35 highest-earning years. If you worked only 30 years, five years of zero earnings are included in the calculation, which lowers your benefit. Working longer can increase your benefit by replacing those zero years with actual earnings.