Social Security Deduction Rate
- Rate: 6.2% of your gross wages.
- Wage Base Limit: Social Security taxes are only withheld on earnings up to the annual wage base limit, which is $160,200 for 2023. Once your income exceeds this limit, no further Social Security taxes will be deducted for the remainder of the year.
For example, if your weekly gross pay is $1,500, your Social Security deduction would be $93 (6.2% of $1,500). If your total earnings exceed $160,200 during the year, the 6.2% rate will no longer apply to income above this amount.
Medicare Deduction Rate
- Rate: 1.45% of your gross wages.
- Additional Medicare Tax: High earners with annual incomes above $200,000 ($250,000 for married couples filing jointly) are subject to an additional 0.9% Medicare tax on earnings exceeding that threshold.
Unlike Social Security, Medicare taxes have no wage base limit, so the 1.45% rate applies to all earnings, no matter how much you make.
Combined FICA Taxes
For most employees, the combined Social Security and Medicare tax rate is 7.65% (6.2% + 1.45%). For high earners subject to the additional Medicare tax, the rate rises to 8.55% on income above $200,000.
Example Calculation
If your weekly gross pay is $1,500:
- Social Security: $93 (6.2% of $1,500)
- Medicare: $21.75 (1.45% of $1,500)
- Total FICA Taxes: $114.75
If you earn over $200,000 annually, an additional 0.9% will be applied to Medicare taxes for the income above that threshold.
Why These Deductions Matter
These taxes fund essential programs that support retirement, healthcare, and disability benefits for millions of Americans. By understanding how these rates affect your paycheck, you can better anticipate your take-home pay and plan your budget.
