How to calculate FICA tax rate?


The Federal Insurance Contributions Act (FICA) is the federal law that requires you to withhold three separate taxes from the wages you pay your employees.

FICA is comprised of the following taxes which you must withhold from an employee's payrolls:

  • 6.2 percent Social Security tax;
  • 1.45 percent Medicare tax (the “regular” Medicare tax);
  • 0.9 percent Medicare surtax only to the extent that wages paid to an employee exceed $200,000 in a calendar year.

The law also requires you to pay the employer's portion of two of these taxes:

  • 6.2 percent Social Security tax; 
  • 1.45 percent Medicare tax (the “regular” Medicare tax).

As you can see, the employer’s portion for the Social security tax and the regular Medicare tax is the same amount that you're required to withhold from your employees' wages. (Different rules apply for employees who receive tip). There is no employer portion for the 0.9 percent Medicare surtax on higher paid employees.

Let's look more deeply
You must withhold a 6.2 percent Social Security tax from your employee’s salaries and you pay an additional 6.2 percent as your employer share of the tax.

6.2 employee portion + 6.2 employer portion = 12.4 percent total

Also, you withhold a 1.45 percent Medicare tax from your employee’s wages and you pay an additional 1.45 percent as your employer share

1.45 employee portion + 1.45 employer portion = 2.9 percent total

The total of all four portions is 15.3 percent

6.2 + 6.2 + 1.45 + 1.45 = 15.3 percent

Unlike the other FICA taxes, the 0.9 percent Medicare surtax is imposed on the employee portion only. There is no employer match for the Medicare surtax (also called the Additional Medicare Tax). You withhold this 0.9 percent tax from employee wages and you do not pay an employer’s portion.

You begin withholding the surtax in the pay period in which you pay wages in excess of 200,000 “floor” to an employee and you continue to withhold it each pay period until the end of the calendar year.

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