What Is FICA on My Pay Stub?

Whether you’re an employee or a small business owner, you know there are plenty of taxes that come out of your pay. Since the US uses a progressive tax system, most people pay different amounts of taxes based on their gross income and other factors.

Let’s take a look.

What Is FICA on My Pay Stub?

FICA stands for the Federal Insurance Contributions Act. This is a federal payroll tax that comes out of each paycheck.

Using a reliable paystub generator, we’re here to answer that question so you can fully understand where your money is going and accurately track your contributions.

The money from FICA helps to fund Social Security and Medicare programs. This goes to support benefits for retirees, disabled people, and children.

The taxes that you pay are recorded. This allows you to earn credits towards Social Security benefits you may use in the future.

High Earners

If you are considered a high earner, you do have a bit more taken out. High earners pay an additional 0.90% towards Medicare tax.

You are considered a high earner if your income is over $200,000 and you are a single filer. If you file jointly, the cut-off is $250,000.

Components of FICA Taxes

On your paystub, you may see the individual components broken down. However, sometimes they are just listed in total as “FICA.”

But there’s one that most people pay at about the same rate: FICA. If you’ve seen the word “FICA” on payday before, you may have wondered “what does FICA mean on a pay stub?” and before you make check stubs online we’re here to answer that question so you can fully understand where your money is going.

Employee Components

As an employee, you may see the components broken down into “Social Security” and “Medicare.” You pay 6.20% of your gross wages towards Social Security. Another 1.45% is towards Medicare tax.

In total, 7.65% of your gross wages are taken out for FICA.

Employer Portion

Your employer also pays employment taxes. They match your FICA tax.

So your employer pays 6.20% towards Social Security and 1.45% towards Medicare. Employers do not need to match the extra 0.90% for high earners.

In total, most employees and employers pay 15.3% of the employee’s gross wages towards FICA taxes.

Self-Employed Individuals

If you ever talk to a self-employed individual, you may hear that they pay the same taxes, but a bit more. While these are for the same purpose, they are technically required because of the Self-Employed Contributions Act (SECA).

Since self-employed people are both the employee and employer, they pay the entire 15.3% of FICA taxes themselves. Luckily, the employer part is tax-deductible.

What Does FICA Mean on a Pay Stub?

Most people know they pay income taxes, but might be confused by the words FICA on their pay stub. Now that you know the answer to “what does FICA mean on a pay stub?” you have a better picture of all of the taxes you need to pay.