Payroll Tax Rates
Each FICA tax has a set rate split evenly between you and your employer. Social Security tax stops once your earnings reach the wage base, which is the yearly cap on income subject to the tax. For 2026, the Social Security wage base is $184,500.
| Tax | You pay | Your employer pays | Applies to |
|---|---|---|---|
| Social Security | 6.2% | 6.2% | Wages up to $184,500 |
| Medicare | 1.45% | 1.45% | All wages |
| Additional Medicare Tax | 0.9% | Nothing | Wages over $200,000 (single filers) |
| Federal unemployment (FUTA) | Nothing | 6.0% (0.6% after state credit) | First $7,000 of wages |
Medicare has no wage base limit, so it applies to every dollar you earn. Combined, Social Security is 12.4% and Medicare is 2.9%.
Who Pays What
The split depends on the tax. Some costs are shared, and some fall only on your employer.
Employee Share
Your share is collected through withholding, meaning your employer takes the tax out of each paycheck and sends it to the IRS for you. On a $1,000 paycheck, that’s $62 for Social Security and $14.50 for Medicare, or $76.50 total.
Higher earners also owe the 0.9% Additional Medicare Tax. The threshold depends on your filing status, the category (like single or married) you use on your tax return:
- $200,000 for single and all other filers
- $250,000 for married filing jointly
- $125,000 for married filing separately
Your employer must start withholding this tax once your wages pass $200,000, whatever your filing status. You figure the final amount on Form 8959.
Employer-Only Taxes
Your employer matches your Social Security and Medicare taxes dollar for dollar. There’s no employer match for the Additional Medicare Tax.
Employers also pay federal unemployment tax, or FUTA, at 6.0% on the first $7,000 of each employee’s wages. Employers can get a credit of up to 5.4% for state unemployment taxes they pay, which brings the net rate to 0.6%. They report FUTA on Form 940, and none of it comes out of your paycheck.
States may add payroll taxes of their own, such as state unemployment tax. Some states also collect payroll taxes for disability or paid leave programs, so your state tax agency is the place to check local rules.
Payroll Taxes for Self-Employed Workers
When you work for yourself, you’re both the employee and the employer, so you pay both halves. This is called self-employment tax, and the rate is 15.3% (12.4% for Social Security plus 2.9% for Medicare).
The tax generally applies to 92.35% of your net earnings, which is your self-employment income after business expenses. You owe it once your net self-employment earnings reach $400, and you report it on Schedule SE.
You can deduct half of what you pay, the employer-equivalent portion, when you figure your adjusted gross income (AGI). AGI is your total income minus certain deductions.
Payroll Tax vs. Income Tax
Payroll tax and federal income tax both come out of your paycheck, but they work differently. Payroll tax is a set percentage of your wages, shown in the rates table above.
Income tax withholding has no flat rate. The amount depends on the information you give your employer on Form W-4, so two people with the same pay can have different amounts withheld. Learning how withholding tax works can help you read your pay stub and spot each deduction.
