How do FICA taxes work for employees and employers in 2025?
Updated for tax year 2025 (filed in 2026) · IRS-sourced
For tax year 2025, FICA taxes are the payroll taxes that fund Social Security and Medicare. If you’re an employee, part is withheld from your paycheck, and your employer generally pays a matching amount.
In 2025, FICA means 6.2% Social Security tax on wages up to $176,100 and 1.45% Medicare tax on all wages for both employees and employers. Employers must also withhold an extra 0.9% Additional Medicare Tax from an employee’s wages over $200,000, but the employer doesn’t match that extra 0.9%.
What FICA includes in 2025
FICA stands for the Federal Insurance Contributions Act. Under IRS guidance, it includes two separate payroll taxes: Social Security tax and Medicare tax. These taxes are reported separately even though people often refer to them together as FICA.
The Social Security part funds old-age, survivors, and disability insurance. The Medicare part funds hospital insurance. For employees, these taxes are usually withheld directly from wages by the employer.
| FICA tax | 2025 employee rate | 2025 employer rate | Wage limit |
|---|---|---|---|
| Social Security | 6.2% | 6.2% | $176,100 |
| Medicare | 1.45% | 1.45% | No limit |
| Additional Medicare | 0.9% | 0% | Applies to employee wages over $200,000 |
How much employees pay and how much employers pay
In 2025, the employee Social Security tax rate is 6.2%, and the employer generally matches that 6.2%. The Social Security wage base for 2025 is $176,100, so Social Security tax applies only up to that amount of wages.
The Medicare tax rate is 1.45% for the employee and 1.45% for the employer. Unlike Social Security tax, regular Medicare tax has no wage cap, so it applies to all covered wages.
That means most employees pay a total basic FICA rate of 7.65% on wages up to the Social Security wage base, made up of 6.2% Social Security plus 1.45% Medicare. Employers generally pay another 7.65% on the same wages, except for the separate Additional Medicare Tax rules.
| 2025 wage amount | Employee Social Security | Employee Medicare | Employer match |
|---|---|---|---|
| First $176,100 | 6.2% | 1.45% | 6.2% + 1.45% |
| Over $176,100 | 0% | 1.45% | 1.45% only |
Additional Medicare Tax over $200,000
Employers must withhold an extra 0.9% Additional Medicare Tax once they pay an employee more than $200,000 in wages during the calendar year. The withholding starts in the pay period when wages go over $200,000 and continues through the rest of the year.
This extra 0.9% applies only to the employee. The employer does not pay a matching Additional Medicare Tax. IRS materials specifically state that there is no employer share of Additional Medicare Tax.
This employer withholding rule is based on wages paid by that employer to that employee. It does not depend on the employee’s tax filing status or wages from other jobs for withholding purposes.
| Rule | 2025 treatment |
|---|---|
| Threshold for employer withholding | $200,000 of wages paid by that employer |
| Employee Additional Medicare rate | 0.9% |
| Employer match required? | No |
An employee’s final Additional Medicare Tax liability on the tax return can differ from what one employer withheld, especially for married couples or people with multiple jobs.
What this means on a paycheck
If you are an employee, your employer withholds your share of Social Security and Medicare from each paycheck and also pays the employer share. On a typical paycheck in 2025, you’ll usually see 6.2% withheld for Social Security until your year-to-date wages reach $176,100, plus 1.45% for Medicare on all wages.
If your wages from one employer go above $200,000 during 2025, that employer must begin withholding the additional 0.9% Medicare tax. So after that point, your Medicare withholding from that employer is effectively 2.35% on additional wages, while the employer still pays only its regular 1.45% Medicare share.
Independent contractors generally aren’t under the regular employee-employer FICA withholding system. This article is about employees and employers only.
| Paycheck item in 2025 | Usual employee withholding |
|---|---|
| Social Security withholding | 6.2% up to $176,100 |
| Medicare withholding | 1.45% on all wages |
| Medicare withholding after wages exceed $200,000 | 2.35% total Medicare withholding on additional wages |
Frequently Asked Questions
What does FICA stand for?
FICA stands for the Federal Insurance Contributions Act. IRS materials explain that it provides the federal system for Social Security and Medicare, reported as separate social security and Medicare taxes. Source: IRS SOURCE CHUNK 1.
What is the Social Security tax rate for employees and employers in 2025?
For 2025, the Social Security tax rate is 6.2% for the employee and 6.2% for the employer, with wages taxed only up to the 2025 Social Security wage base of $176,100. Sources: IRS SOURCE CHUNK 4 for the 6.2% rate and 2025 wage-base figure provided in the prompt.
Is there a wage limit for Medicare tax in 2025?
No. IRS publications state that the Medicare tax rate is 1.45% each for employee and employer, and there is no wage base limit for Medicare tax. Source: IRS SOURCE CHUNK 2.
When does Additional Medicare Tax start being withheld in 2025?
An employer must begin withholding the extra 0.9% in the pay period when it pays wages over $200,000 to that employee and continue withholding through the end of the calendar year. Sources: IRS SOURCE CHUNK 1 and IRS SOURCE CHUNK 7.
Does the employer match the Additional Medicare Tax?
No. IRS guidance says Additional Medicare Tax is imposed only on the employee, and there is no employer share. Source: IRS SOURCE CHUNK 1.
Why might my total Medicare tax on my return differ from what my employer withheld?
Employer withholding for Additional Medicare Tax is based on whether that employer pays you more than $200,000 in the year. Your actual tax on your return can differ because your filing status and wages from multiple jobs can change the final result, even though the employer follows the IRS withholding rule once wages exceed $200,000. Sources: IRS SOURCE CHUNK 1 and IRS SOURCE CHUNK 7.
TaxGPT.ai provides information from official IRS publications. This is not tax advice. Consult a qualified tax professional for your specific situation.
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