FICA, which stands for the Federal Insurance Contributions Act, is a United States federal payroll tax. It funds Social Security and Medicare. As an employee, a portion of your earnings is automatically withheld by your employer and sent to the government to cover these essential programs. Understanding how FICA is calculated can help you better manage your finances and understand your pay stub.
The Components of FICA
FICA is composed of two distinct taxes:
Social Security Tax: This tax funds retirement, disability, and survivor benefits. For 2024, the tax rate is 6.2% for employees. This tax is capped annually; earnings above a certain limit (the Social Security wage base) are not subject to this tax.
Medicare Tax: This tax funds the federal health insurance program for seniors and individuals with certain disabilities. For 2024, the tax rate is 1.45% for employees. Unlike Social Security tax, there is no income limit for Medicare tax. All your wages are subject to this tax.
How the Calculation Works
The FICA withholding is the sum of the employee's portion of Social Security tax and Medicare tax.
1. Social Security Tax Calculation:
The Social Security tax is calculated as 6.2% of your gross wages, but only up to the annual Social Security wage base limit. If your year-to-date earnings have already reached or exceeded the wage base, you will not owe any more Social Security tax for the rest of the year.
The formula is:
Social Security Tax = MIN(Gross Wages, Social Security Wage Base Limit) * 0.062
In practice, your employer tracks your year-to-date earnings. If your current pay period's gross wages, when added to your year-to-date earnings, exceed the wage base, the Social Security tax is only applied to the portion of your wages that brings you *up to* the wage base limit.
2. Medicare Tax Calculation:
The Medicare tax is calculated as 1.45% of your gross wages. There is no wage base limit for the standard Medicare tax. Additionally, high earners may be subject to an Additional Medicare Tax, but this calculator focuses on the standard withholding.
The formula is:
Medicare Tax = Gross Wages * 0.0145
3. Total FICA Tax:
The total FICA withholding is the sum of these two taxes.
The formula is:
Total FICA Tax = Social Security Tax + Medicare Tax
Example Calculation
Let's assume the following:
Gross Wages for the pay period: $1,500.00
Social Security Wage Base Limit for the year: $168,600.00
(For simplicity, we'll assume year-to-date wages are well below the limit, so the full gross wages are subject to SS tax in this instance.)
Total FICA Tax:
$93.00 (Social Security Tax) + $21.75 (Medicare Tax) = $114.75
Therefore, the total FICA withholding for this pay period would be $114.75.
When to Use This Calculator
This calculator is useful for:
Estimating your take-home pay.
Understanding your pay stub deductions.
Projecting your tax liabilities throughout the year, especially if you approach the Social Security wage base limit.
Remember, this calculator provides an estimate based on the standard FICA rates and limits. It does not account for the Additional Medicare Tax, state and local taxes, or other potential payroll deductions.
function calculateFICA() {
var grossWagesInput = document.getElementById("grossWages");
var socialSecurityWageBaseInput = document.getElementById("socialSecurityWageBase");
var resultDiv = document.getElementById("result");
// Clear previous results
resultDiv.innerHTML = "";
var grossWages = parseFloat(grossWagesInput.value);
var socialSecurityWageBase = parseFloat(socialSecurityWageBaseInput.value);
// Validate inputs
if (isNaN(grossWages) || grossWages < 0) {
resultDiv.innerHTML = "Please enter a valid positive number for Gross Wages.";
return;
}
if (isNaN(socialSecurityWageBase) || socialSecurityWageBase <= 0) {
resultDiv.innerHTML = "Please enter a valid positive number for the Social Security Wage Base Limit.";
return;
}
// FICA Rates for Employees (2024)
var socialSecurityRate = 0.062; // 6.2%
var medicareRate = 0.0145; // 1.45%
// Calculate Social Security Tax
// For simplicity, this calculator assumes year-to-date earnings are below the base.
// A real payroll system tracks YTD earnings. Here we just cap the current wages.
var taxableSocialSecurityWages = Math.min(grossWages, socialSecurityWageBase);
var socialSecurityTax = taxableSocialSecurityWages * socialSecurityRate;
// Calculate Medicare Tax
var medicareTax = grossWages * medicareRate;
// Calculate Total FICA Tax
var totalFicaTax = socialSecurityTax + medicareTax;
// Display the results
resultDiv.innerHTML =
"$" + totalFicaTax.toFixed(2) +
"Total FICA Withholding";
// Optional: Display individual components
// resultDiv.innerHTML +=
// "(Social Security: $" + socialSecurityTax.toFixed(2) + ", Medicare: $" + medicareTax.toFixed(2) + ")";
}