The tax rates that come out of your paycheck

Medicare tax is 2.9 percent of your wages, and Social Security tax is 6.2 percent. Your employer pays an equal amount for each — that money does not come from your paycheck, but it is part of what your employer owes on your behalf. If you are self-employed, you pay both the employee and employer portions, which doubles your rate to 15.3 percent for Social Security and 5.8 percent for Medicare combined.

These percentages have been set by federal law and do not change based on your income or age. A 25-year-old and a 65-year-old pay the same rate. The only exception is the Additional Medicare Tax of 0.9 percent, which applies to wages above a certain threshold — $200,000 for single filers, $250,000 for married couples filing jointly. This extra tax comes entirely from your paycheck; your employer does not match it.

The total you see withheld from your paycheck each pay period depends on your gross wages and how often you are paid. If you earn $3,000 in a two-week paycheck, you will see roughly $186 withheld for Social Security (6.2 percent) and $87 for Medicare (2.9 percent), before any Additional Medicare Tax applies.

Key Takeaways

  • Social Security tax is 6.2 percent of your wages and Medicare tax is 2.9 percent, taken directly from your paycheck.
  • Your employer pays an equal 6.2 percent for Social Security and 2.9 percent for Medicare on top of your salary, though you do not see this amount.
  • If you are self-employed, you pay both the employee and employer share, totaling 15.3 percent for Social Security and 5.8 percent for Medicare.
  • An Additional Medicare Tax of 0.9 percent applies to wages over $200,000 (single) or $250,000 (married filing jointly) and comes only from your paycheck.
  • These rates are set by federal law and explore the same way to all workers, regardless of age or income level.

Why these taxes are withheld from your paycheck

Social Security and Medicare taxes fund two separate federal programs. Social Security tax goes into a trust fund that pays retirement benefits, disability benefits, and survivor benefits to workers and their families. Medicare tax funds the hospital insurance part of Medicare (Part A), which covers inpatient hospital stays, skilled nursing care, and hospice.

These are not optional deductions. Federal law requires employers to withhold them from every paycheck and send the money to the U.S. Treasury. You cannot opt out, even if you plan to retire early or if you have private insurance. The only exception is certain religious groups that have received a formal exemption from the Internal Revenue Service, but this is rare and requires a specific process process.

The money withheld is credited to your individual Social Security account. When you turn 62 or older, you can begin drawing Social Security retirement benefits based on how much you paid in and for how long. Similarly, the Medicare tax you pay now funds your Medicare may be able to access at age 65, even if you never paid into the system before that age.

How self-employment tax works differently

If you are self-employed — meaning you work for yourself or own a business — you pay both the employee and employer portions of Social Security and Medicare tax. This is called self-employment tax, and it totals 15.3 percent: 12.4 percent for Social Security and 2.9 percent for Medicare. You calculate this on your net business income (income minus business expenses) when you file your annual tax return.

Self-employed workers report self-employment tax on Schedule SE, which is part of the standard tax return form. You do not pay this tax through payroll withholding; instead, you either pay it when you file your return or make quarterly estimated tax payments throughout the year. Many self-employed people set aside money each month to cover this bill, since it can be substantial.

The good news is that you can deduct half of your self-employment tax from your income when calculating your federal income tax. This reduces your overall tax burden slightly, but it does not reduce the amount you owe for Social Security and Medicare themselves.

What happens when you reach full retirement age

Once you reach your full retirement age — which ranges from 66 to 67 depending on your birth year — you stop paying Social Security tax on your wages if you are still working. However, you continue to pay Medicare tax for as long as you work, even after you start drawing Social Security benefits. This means the withholding from your paycheck changes once you reach full retirement age.

If you continue working past full retirement age and have not yet begun Social Security benefits, you build additional credits that increase your monthly benefit amount. There is no upper age limit for earning these credits, so working longer always increases your eventual benefit, up to age 70.

Medicare tax continues throughout your working life because Medicare is not based on reaching a certain age in the same way Social Security is. You become may be able to access for Medicare at 65 regardless of whether you have retired, but the tax itself continues as long as you have earned income.

How to read your pay stub

Your pay stub shows exactly how much Social Security and Medicare tax was withheld from that paycheck. Look for lines labeled "FICA" (which stands for Federal Insurance Contributions Act — the law that created these taxes), "Social Security," "Medicare," or "OASDI" (Old-Age, Survivors, and Disability Insurance). Some pay stubs break these out separately; others combine them.

The amount withheld should equal 6.2 percent of your gross wages for Social Security and 2.9 percent for Medicare. If you earn over the Additional Medicare Tax threshold, you will see an extra line for that 0.9 percent. Comparing the withholding to your gross pay is a quick way to verify your employer is calculating it correctly.

If you notice the withholding seems wrong — for example, if it suddenly stops even though you are still working — contact your payroll department or HR. Sometimes errors happen, and catching them early makes them easier to fix. You can also review your Social Security earnings record online at ssa.gov to confirm the government has the correct record of what you paid in each year.

The wage base limit for Social Security tax

Social Security tax only applies to the first portion of your income each year. In 2024, that limit is $168,600 — meaning if you earn more than that, you stop paying Social Security tax once you reach it. Medicare tax, by contrast, has no upper limit; you pay 2.9 percent on all your wages no matter how much you earn.

This wage base limit changes each year based on inflation. The Social Security Administration announces the new limit in October for the following year. If you are a high earner or work multiple jobs, this limit matters because it means your effective tax rate drops once you exceed it. For example, someone earning $200,000 pays Social Security tax on only $168,600 of that income, not the full amount.

Self-employed workers also have this same wage base limit. You calculate self-employment tax on your net business income up to the limit, then only pay the Medicare portion (2.9 percent) on income above it.

Frequently Asked Questions

Can I get a refund of Social Security and Medicare taxes I paid?

No. These taxes fund your future benefits and are not refundable. However, if your employer withheld the wrong amount, you can file an amended tax return to correct it. If you overpaid because you worked multiple jobs and hit the Social Security wage base limit more than once, you can claim a credit on your tax return.

Do I pay these taxes on all my income?

Social Security tax applies to wages and self-employment income up to the annual wage base limit ($168,600 in 2024). Medicare tax applies to all wages and self-employment income with no upper limit. Investment income, rental income, and other non-wage income are generally not subject to these taxes, though they may be subject to other taxes.

What if I work for two employers at the same time?

Each employer withholds Social Security and Medicare tax separately based on what you earn from them. If your combined income from both jobs exceeds the Social Security wage base limit, you will overpay Social Security tax. You can claim the overpayment as a credit on your tax return when you file.

Do immigrants and visa holders pay these taxes?

Most workers in the United States pay Social Security and Medicare taxes regardless of immigration status, as long as they have a valid Social Security number or Individual Taxpayer Identification Number (ITIN). Some visa holders may have exemptions depending on their visa type and tax treaty agreements between the U.S. and their home country.

When do I start seeing these taxes withheld from my paycheck?

Social Security and Medicare taxes are withheld from your first paycheck as soon as you begin work. There is no waiting period or age requirement. Even teenagers working part-time jobs pay these taxes, and the money is credited to their Social Security account.