Updated 30 March 2026
Medicare vs Social Security Tax
Both are FICA payroll taxes deducted from every paycheck, but they work very differently. Medicare has no wage cap but a lower rate. Social Security has a higher rate but stops at $176,100. Here is the full side-by-side breakdown.
1.45%
employee rate
No wage base cap
+0.9% surtax over $200K
6.2%
employee rate
$176,100 wage base cap
Max employee tax: $10,918
What Is FICA?
FICA stands for the Federal Insurance Contributions Act. It is the law that authorizes both Medicare and Social Security payroll taxes. When you see "FICA" on your pay stub, it typically refers to the combined total of both taxes.
For employees earning under the Social Security wage base ($176,100 in 2026), the total FICA rate is 7.65% (6.2% Social Security + 1.45% Medicare). Your employer pays a matching 7.65%, bringing the combined FICA rate to 15.3%.
Once your wages exceed $176,100, Social Security tax stops, but Medicare tax continues on all additional earnings. If your wages also exceed $200,000, the Additional Medicare Tax (0.9%) kicks in, making the marginal FICA rate 2.35% (1.45% + 0.9%) on income above $200,000.
Full Comparison
Every significant difference between Medicare and Social Security payroll taxes.
| Feature | Medicare | Social Security |
|---|---|---|
| Official name | Hospital Insurance (HI) Tax | Old-Age, Survivors, and Disability Insurance (OASDI) Tax |
| Employee rate | 1.45% | 6.2% |
| Employer rate | 1.45% | 6.2% |
| Combined rate | 2.9% | 12.4% |
| Self-employed rate | 2.9% | 12.4% |
| Wage base cap (2026) | None (unlimited) | $176,100 |
| Surtax for high earners | +0.9% over $200K/$250K | None |
| Investment income tax | 3.8% NIIT (related) | None |
| What it funds | Medicare Part A (hospital insurance) | Social Security retirement, disability, survivors benefits |
| Trust fund status (2026) | Projected solvent through 2036 | Projected solvent through 2035 |
| Threshold indexed for inflation? | No (frozen since 2013) | Yes (wage base adjusts annually) |
| Benefits linked to contributions? | No (Medicare eligibility is binary) | Yes (benefits based on 35 highest-earning years) |
| Tax form (employees) | W-2 Box 5 and Box 6 | W-2 Box 3 and Box 4 |
| Tax form (self-employed) | Schedule SE | Schedule SE |
FICA Tax by Salary Level
Employee share only. Notice how the effective FICA rate drops as income rises because Social Security tax caps out while Medicare continues.
| Salary | SS Tax (6.2%) | Medicare Tax | Total FICA | Effective Rate |
|---|---|---|---|---|
| $50,000 | $3,100 | $725 | $3,825 | 7.65% |
| $100,000 | $6,200 | $1,450 | $7,650 | 7.65% |
| $176,100 | $10,918 | $2,553 | $13,471 | 7.65% |
| $200,000 | $10,918 | $2,900 | $13,818 | 6.91% |
| $250,000 | $10,918 | $4,075 | $14,993 | 6.00% |
| $500,000 | $10,918 | $9,950 | $20,868 | 4.17% |
| $1,000,000 | $10,918 | $21,700 | $32,618 | 3.26% |
Medicare tax column includes the 0.9% Additional Medicare Tax on income over $200,000 (single filer). Social Security tax caps at $10,918 ($176,100 x 6.2%).
The Wage Base Cap Difference
Medicare: No Cap
Medicare tax applies to every dollar you earn, regardless of amount. A person earning $50,000 and a person earning $5,000,000 both pay 1.45% on their entire income. There has never been a wage base limit for Medicare tax.
This means Medicare tax is proportional (the same percentage for everyone) up to $200,000, and slightly progressive above that due to the 0.9% surtax. Someone earning $500,000 pays an effective Medicare rate of about 1.99%.
Social Security: $176,100 Cap
Social Security tax only applies to the first $176,100 of wages in 2026. Once you reach that amount, Social Security withholding stops for the rest of the year. The maximum employee Social Security tax is $10,918.
This makes Social Security tax regressive at high incomes. Someone earning $176,100 pays 6.2%. Someone earning $500,000 pays an effective rate of only 2.18%. Congress has periodically debated removing or raising this cap to shore up the Social Security Trust Fund.
Social Security Wage Base History
The Social Security wage base increases most years based on the National Average Wage Index. Medicare has no equivalent limit.
| Year | Wage Base | Change |
|---|---|---|
| 2020 | $137,700 | +3.6% |
| 2021 | $142,800 | +3.7% |
| 2022 | $147,000 | +2.9% |
| 2023 | $160,200 | +9.0% |
| 2024 | $168,600 | +5.2% |
| 2025 | $176,100 | +4.4% |
| 2026 | $176,100 | 0% (projected) |
Key Takeaways
Your total FICA rate is 7.65% on income up to $176,100 (6.2% SS + 1.45% Medicare). Your employer matches this, for a combined 15.3%.
Above $176,100, only Medicare tax (1.45%) continues. Social Security stops.
Above $200,000 (single) or $250,000 (MFJ), you also pay the 0.9% Additional Medicare Tax, bringing your marginal rate to 2.35%.
Self-employed people pay both shares: 12.4% SS (up to cap) + 2.9% Medicare, for a maximum rate of 15.3%. They deduct half as an income tax adjustment.
Medicare tax is the only payroll tax with no upper limit. Every dollar of earned income is subject to it.
The Social Security wage base adjusts annually for inflation. The Additional Medicare Tax thresholds do not, meaning more taxpayers are affected each year.