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

Social Security tax is 6.2% of your wages, and Medicare tax is 1.45% of your wages. Your employer pays an equal amount for each — the percentages you see on your pay stub are only your half. If you are self-employed, you pay both halves yourself, which comes to 12.4% for Social Security and 2.9% for Medicare.

These amounts are fixed by federal law and do not change based on your income or age. The only exception is Social Security tax, which stops once you reach the annual wage cap — in 2024, you pay no more Social Security tax after earning $168,600 in a calendar year. Medicare tax has no wage cap, so you pay 1.45% on every dollar you earn, no matter how much that is.

If you earn over $200,000 as a single filer (or $250,000 married filing jointly), you also pay an additional 0.9% Medicare tax on the income above that threshold. This extra tax was added in 2013 and applies to both employees and self-employed workers.

Key Takeaways

  • Social Security tax is 6.2% of your wages up to the annual cap ($168,600 in 2024), and Medicare tax is 1.45% with no cap.
  • Your employer pays an equal share, so the total cost to your employer is double what you see withheld from your paycheck.
  • Self-employed workers pay both the employee and employer share, totaling 12.4% for Social Security and 2.9% for Medicare.
  • An additional 0.9% Medicare tax applies to high earners above $200,000 (single) or $250,000 (married filing jointly).
  • These tax rates are set by federal law and have remained the same since 1990 for Social Security and 2013 for the additional Medicare tax.

Understanding the Social Security wage cap

The Social Security wage cap is the maximum amount of income subject to Social Security tax in a given year. Once you earn that amount, no more Social Security tax is withheld from your paycheck for the rest of the calendar year. The cap changes each year based on average wage growth — it was $160,200 in 2023 and $168,600 in 2024.

This cap affects higher earners most directly. A person earning $200,000 per year pays Social Security tax on only the first $168,600 of that income (in 2024), meaning they pay no Social Security tax on the remaining $31,400. A person earning $50,000 pays Social Security tax on all $50,000 because they never reach the cap.

The wage cap does not affect Medicare tax. You pay 1.45% Medicare tax on every dollar you earn, regardless of how much that is. This is why high earners often pay a much larger percentage of their income in Medicare tax than in Social Security tax.

Why these taxes are withheld from your paycheck

Social Security tax funds the Social Security program, which pays retirement benefits, survivor benefits, and disability benefits. Medicare tax funds the Medicare program, which covers hospital insurance (Part A), medical insurance (Part B), and prescription drug coverage (Part D) for people 65 and older, as well as some younger people with disabilities or end-stage renal disease.

These are not savings accounts in your name. The taxes you pay today go directly to current beneficiaries — retirees, disabled workers, and their families. When you retire, your benefits come from taxes paid by workers at that time. The amount you receive is based on your earnings record and the age at which you claim, not on how much tax you paid.

Both programs are funded on a pay-as-you-go basis, meaning current workers support current beneficiaries. This is why changes to either program require changes to the tax rate, the wage cap, or the benefits themselves.

What self-employed workers pay

If you are self-employed, you pay both the employee and employer share of Social Security and Medicare taxes. This is called self-employment tax. The total is 15.3% — 12.4% for Social Security (up to the wage cap) and 2.9% for Medicare.

You calculate self-employment tax on your net business income, not your gross revenue. Net income is what remains after you subtract business expenses. You report this on Schedule SE (Self-Employment Tax) when you file your federal income tax return.

The IRS allows you to deduct half of your self-employment tax when you calculate your adjusted gross income, which reduces your overall tax burden slightly. You still pay the full amount, but the deduction lowers the income subject to federal income tax.

How to read these amounts on your pay stub

Your pay stub shows the taxes withheld from your paycheck under labels like "Social Security Tax," "FICA," "OASDI" (Old-Age, Survivors, and Disability Insurance), or "6.2%." Medicare tax appears as "Medicare Tax," "Medicare," "HI" (Hospital Insurance), or "1.45%." Some pay stubs also show "Additional Medicare Tax" if you earn over the threshold.

The amounts withheld are calculated on your gross pay before any deductions for health insurance, retirement contributions, or other benefits. If you contribute to a traditional 401(k) or similar plan, those contributions reduce your taxable wages for income tax purposes but not for Social Security or Medicare tax — you still pay these taxes on the full amount.

If you notice the withholding stops partway through the year, that is the Social Security wage cap at work. Once you reach the cap, "Social Security Tax" will show zero for the rest of the calendar year, but Medicare tax continues.

Changes to tax rates over time

The Social Security tax rate has been 6.2% since 1990. Before that, it was lower — in 1980 it was 5.08%, and it gradually increased as the program's finances changed. The rate is set by Congress and can only be changed by law.

The Medicare tax rate was 1.45% from 1966 until 2013. In 2013, the additional 0.9% Medicare tax on high earners took effect as part of the Affordable Care Act. This additional tax applies only to wages above $200,000 (single) or $250,000 (married filing jointly).

The wage cap for Social Security is adjusted each year based on the National Average Wage Index published by the Social Security Administration. This means the cap generally increases each year, though the increase varies depending on wage growth in the economy.

Frequently Asked Questions

Do I get back the Social Security and Medicare taxes I paid?

Not directly. These taxes fund current benefits for retirees and disabled workers. When you retire, you receive Social Security benefits based on your earnings record and claiming age, not on the amount of tax you paid. The amount you paid in does not determine what you get out — the formula is more complex and involves your 35 highest-earning years.

What happens to my Social Security tax after I reach the wage cap?

Once you earn the annual wage cap ($168,600 in 2024), no more Social Security tax is withheld from your paycheck for the rest of that calendar year. Medicare tax continues to be withheld on all earnings. The cap resets on January 1 of each new year.

Can I opt out of paying Social Security or Medicare tax?

No. These taxes are mandatory for all workers, with very limited exceptions. Some religious groups and certain government employees may have exemptions, but most workers must pay. Self-employed workers cannot opt out either.

Why do I pay Medicare tax if I am not 65 yet?

Medicare tax funds the program for all beneficiaries, not just those currently receiving benefits. You pay in while working so that the program is funded when you and others reach 65 or become disabled. The tax is collected from all workers regardless of age.

If I have two jobs, do I pay Social Security tax twice?

Yes, you pay Social Security tax on earnings from both jobs up to the annual wage cap. However, if your combined earnings exceed the cap, you may have overpaid. You can claim a credit for the overpayment when you file your federal income tax return, and the IRS will refund it.