How much comes out of your paycheck for Medicare and Social Security

If you work, your employer and you split the cost. You pay 6.2% of your wages into Social Security and 1.45% into Medicare — that's 7.65% total from your paycheck. Your employer matches both amounts, so the government receives 15.3% of your gross pay combined. These are called FICA taxes (Federal Insurance Contributions Act).

The Social Security tax stops once you reach a certain income level each year — in 2024, that threshold is $168,600. After you earn that much, no more Social Security tax comes out. Medicare tax, however, has no income cap. If you earn $200,000, you pay Medicare tax on all of it.

If you're self-employed, you pay both the employee and employer share yourself — 12.4% for Social Security and 2.9% for Medicare, totaling 15.3%. You can deduct half of this on your tax return, but you still write the full check.

Key Takeaways

  • Employees pay 6.2% for Social Security and 1.45% for Medicare from each paycheck, while employers match both amounts.
  • Social Security tax stops once you reach the annual income cap ($168,600 in 2024), but Medicare tax continues on all earnings with no limit.
  • Self-employed workers pay the full 15.3% combined rate themselves, though they can deduct half on their taxes.
  • These taxes fund current retirees and disabled workers — they are not personal savings accounts that grow with interest.

What happens to the money you pay in

The taxes you pay do not sit in an account with your name on it. Instead, they go directly to current retirees, disabled workers, and survivors of workers who have died. Social Security and Medicare are pay-as-you-go programs — today's workers fund today's beneficiaries.

When you reach retirement age (66 to 67 for most people now), your benefits come from taxes that current workers are paying. The amount you receive is based on your earnings history and the age you start taking benefits, not on how much you personally paid in.

Additional Medicare tax for higher earners

If your income exceeds certain thresholds, you pay an extra 0.9% Medicare tax on the amount over the limit. For 2024, that threshold is $200,000 for single filers and $250,000 for married couples filing jointly. This extra tax applies to wages, self-employment income, and some investment income.

Unlike regular Medicare tax, this additional tax does not have an employer match — you pay it entirely yourself if you're an employee. Self-employed workers also pay the full amount with no offset.

What these taxes cover

Social Security tax funds retirement benefits, disability benefits (SSDI), and survivor benefits for families of deceased workers. Medicare tax funds Part A (hospital insurance) and Part B (medical insurance). These are separate programs with separate trust funds, even though both come out of your paycheck.

Medicare Part D (prescription drug coverage) and Medigap supplemental plans are not funded by payroll taxes — you pay premiums directly for those if you choose them.

Taxes on Social Security benefits themselves

Once you start receiving Social Security, you may owe federal income tax on part of your benefits. This depends on your combined income — your adjusted gross income plus non-taxable interest plus half your Social Security benefits.

If your combined income exceeds $25,000 (single) or $32,000 (married filing jointly), up to 50% of your benefits may be taxable. If it exceeds $34,000 (single) or $44,000 (married), up to 85% may be taxable. You do not pay Social Security tax again on benefits — only federal income tax, and only if your total income crosses these thresholds.

State taxes on Social Security and Medicare

Thirteen states tax Social Security benefits: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, and West Virginia. The rules vary by state — some exempt benefits below a certain income level, and some phase in the tax gradually.

Medicare taxes are not subject to state income tax in any state. If you live in one of the thirteen states that taxes Social Security, check your state's tax agency website or a tax professional for the specific rules in your situation.

How to check your Social Security tax record

You can view your earnings history and estimated benefits on your Social Security account at ssa.gov. Create an account using your email, or use login.gov if you already have one. The site shows how much you and your employers have paid into Social Security over your working life.

Review this record every few years to catch errors. If you spot a discrepancy — a missing year, an employer name that's wrong, or earnings that don't match your records — contact Social Security at 1-800-772-1213 to file a correction. Errors can lower your future benefits.

Frequently Asked Questions

Do I pay Social Security and Medicare tax on all my income?

Social Security tax stops once you reach the annual income cap ($168,600 in 2024), but Medicare tax continues on all earnings. If you're self-employed, you pay on your net self-employment income after deducting business expenses.

Can I opt out of Social Security or Medicare taxes?

No. These are mandatory payroll taxes for all employees and self-employed workers. Some religious groups may request an exemption, but the process is strict and rare. Once you stop working, you stop paying these taxes.

What if I worked in another country — do those years count?

It depends on whether that country has a Social Security agreement with the United States. Some do, some don't. Contact Social Security to ask about credits from work outside the U.S., or visit ssa.gov/international for a list of countries with agreements.

If I delay taking Social Security, do I get back more than I paid in?

Not necessarily. Delaying increases your monthly benefit, but whether you come out ahead depends on how long you live. The "break-even" point is typically in your early 80s. This is a personal decision based on your health, family history, and financial needs.

Are Medicare premiums taken out before or after I see my benefit amount?

Medicare Part B and Part D premiums are deducted from your Social Security check each month. You see the net amount after premiums are removed. If you don't take Social Security yet, you pay Medicare premiums separately by bill or bank draft.