By Everyday Royalties Editorial • Sep 29, 2025
FICA Explained: Social Security, Medicare, and the Wage Base
By Everyday Royalties Editorial • Sep 29, 2025
FICA covers Social Security and Medicare. For most employees, 7.65% is withheld (with an employer match). One wrinkle: Social Security stops at the annual wage base, while Medicare continues—and high earners pay an additional surtax.
Social Security (OASDI)
Withheld up to the annual wage base. After you hit that cap in a year, OASDI no longer reduces your paychecks.
Medicare (HI)
Withheld on all wages with no cap. An additional surtax applies above certain thresholds; employers don’t match the surtax.
Multiple Jobs?
You may overpay OASDI if multiple employers withhold up to the cap; you can reconcile at tax time. Keep an eye on YTD totals.
Planning Angle
Hitting the wage base mid‑year makes later paychecks slightly larger. Budgeting ahead avoids surprises.
Quick FICA Calcs
Estimate your per‑check FICA by multiplying gross by 7.65% (up to the OASDI cap). Remember, Medicare continues above the cap.
FAQ
Why did my paycheck jump mid‑year?
You likely hit the Social Security wage base; OASDI stopped withholding.
Do pre‑tax contributions reduce FICA?
Some do (e.g., traditional 401(k) does not reduce FICA), while certain benefits may. Check plan details.