FICA payroll tax combines Social Security and Medicare taxes on covered wages. It is separate from federal income tax, uses different wage rules and should not be reduced by every deduction that lowers taxable income.
Formula and decision rule
Employee Social Security tax = 6.2% × covered wages up to the 2026 wage base of $184,500. Employee Medicare tax is generally 1.45% of covered wages, plus a 0.9% Additional Medicare Tax on employee wages above the applicable filing-status threshold. Employers have separate obligations.
Worked example
For an employee with $75,000 of covered W-2 wages and no payroll cafeteria-plan reduction, Social Security tax is $4,650 and regular Medicare tax is $1,087.50, totaling $5,737.50 before federal income tax. The Additional Medicare threshold is not reached in this example.
Income-tax deductions are not all FICA deductions
Traditional 401(k) contributions commonly reduce federal taxable wages but not Social Security or Medicare wages. Eligible HSA or Section 125 payroll contributions can receive different payroll-tax treatment. Traditional IRA contributions occur outside payroll and do not reduce FICA wages.
What this guide does not calculate
Self-employment tax, tip rules, household employment, railroad retirement and specialized wage situations require their own instructions. BriskCalc’s federal calculator is designed around ordinary W-2 wage estimates.
Use the calculator
The 2026 Federal Income Tax Calculator separates traditional 401(k), eligible payroll HSA/Section 125 and deductible IRA inputs before estimating FICA.
Primary sources
- SSA contribution and benefit base
- IRS Topic 751 — Social Security and Medicare withholding
- IRS Topic 560 — Additional Medicare Tax
Frequently asked questions
Does Medicare tax stop at the Social Security wage base?
No. Regular Medicare tax does not use the Social Security wage cap.
Is the employer share deducted from employee take-home pay?
The calculator shows the employee share. Employer payroll obligations are separate and should not be subtracted again from employee net pay.
Change log
Published August 21, 2026 using the SSA 2026 wage base and IRS payroll-tax guidance.