Payroll Tax Calculator
FICA. Social Security and Medicare withheld.
Details
Your FICA payroll tax
$5,355
Withheld from your paychecks each year
Effective rate
7.65%
Employer pays
$5,355
This works out the payroll taxes on wages: Social Security and Medicare, for both the employee and employer halves.
It also handles self-employment tax, where one person pays both halves.
What payroll tax is
Payroll tax funds Social Security and Medicare, and it is separate from income tax. It is often called FICA, after the law that created it.
An employee pays 6.2% for Social Security and 1.45% for Medicare, so 7.65% in total. What the payslip does not show is that the employer pays exactly the same again, so 15.3% of your wages goes to these programmes.
That hidden half is why self-employment tax feels so steep. A self-employed person is both employee and employer, so they pay the whole 15.3% themselves. It is not a penalty for self-employment; it is the same total, made visible.
Only the first $4,590 appears on your payslip. The employer half is real money paid on your behalf, and economists generally treat it as coming out of wages in the end.
What to enter
- Gross wages
- Pay before deductions. Some pre-tax benefits reduce the wages FICA applies to, though 401(k) contributions do not.
- Employment type
- Employed or self-employed. This decides whether you pay 7.65% or 15.3%.
- Filing status
- Relevant only for the Additional Medicare Tax, which applies above an income threshold that varies by status.
The components of payroll tax
- Social Security
- 6.2% from the employee and 6.2% from the employer, up to an annual wage base the IRS updates each year. Earnings above the base are not charged.
- Medicare
- 1.45% from each side, with no upper limit. It applies to every dollar of wages.
- Additional Medicare Tax
- An extra 0.9% on high earners above a threshold that depends on filing status. The employee pays it; the employer does not match it.
- Self-employment tax
- The full 15.3%, charged on 92.35% of net earnings. Half of it is deductible against income tax.
What this assumes
Rates are the long-standing 6.2% and 1.45%, but the wage base and the Additional Medicare threshold change most years. Check current IRS figures.
This is payroll tax only. Federal and state income tax are separate and come out as well.
How to calculate payroll tax on your wages
Two percentages on your wages, doubled if you are self-employed.
- 7.65%
- 6.2% Social Security plus 1.45% Medicare
- 92.35%
- The adjustment that mirrors the employer's deduction for its half
Apply Social Security up to the wage base. 6.2% on earnings up to the annual cap. High earners stop paying this part partway through the year.
Apply Medicare to everything. 1.45% with no cap, on every dollar.
Double it if you are self-employed. 15.3% total, but charged on 92.35% of net earnings rather than the full amount.
Add the Additional Medicare Tax if it applies. 0.9% on income above the threshold for your filing status. Unlike the rest, the employer does not match this.
See a worked example: the same income, employed and self-employed
- Income
- $60,000
- Comparison
- W-2 employee against self-employed
Employed: $60,000 × 6.2% = $3,720 Social Security, plus $60,000 × 1.45% = $870 Medicare. Your share is $4,590.
Your employer pays another $4,590, so $9,180 goes to these programmes in total.
Self-employed: net earnings are adjusted to $60,000 × 92.35% = $55,410.
Self-employment tax: $55,410 × 15.3% = $8,478. Half of that, $4,239, is deductible against income tax.
$4,590 employed, $8,478 self-employed
Frequently asked questions
The Federal Insurance Contributions Act tax: 6.2% for Social Security and 1.45% for Medicare, so 7.65% of your gross wages.
On a payslip it may appear as one FICA line or as two separate ones. Either way it is not income tax, which is withheld separately.
It is not higher in total; it is just all visible. An employee pays 7.65% and their employer quietly pays another 7.65%. A self-employed person is both, so they pay 15.3%.
Two adjustments soften it: the tax applies to 92.35% of net earnings rather than all of it, and half of what you pay is deductible against income tax.
On the Social Security part, yes. It stops at an annual wage base that the IRS raises most years, so high earners see that 6.2% disappear from their payslip partway through the year.
Medicare has no cap at all, and high earners pay an extra 0.9% above a threshold set by filing status.
No. Traditional 401(k) contributions reduce your taxable income for income tax, but Social Security and Medicare are still charged on the full amount.
Some other pre-tax benefits do reduce FICA wages, notably health insurance premiums and contributions to an HSA or FSA through a Section 125 plan.
Not as a refund. Payroll tax buys entitlement: your Social Security benefit is calculated from your highest 35 years of indexed earnings, and Medicare eligibility generally needs 40 quarters of work.
So it is closer to a contribution than a tax, though what you eventually receive depends on rules that can change.
Each employer withholds Social Security independently, without knowing about the other, so you can overpay by exceeding the annual wage base across both.
You claim the excess back as a credit on your tax return. Medicare has no cap, so there is never an overpayment on that part.
Problems people actually run into
Being surprised by self-employment tax in the first year
New freelancers budget for income tax and forget the 15.3%. On $60,000 of net earnings that is $8,478 nobody withheld for them.
Set money aside from every payment, and remember quarterly estimated payments are generally required. The penalty for skipping them is separate from the tax itself.
Comparing a contract rate against a salary as if they were equal
A $60,000 salary and $60,000 of contract income are not the same. The contractor pays roughly $3,888 more in payroll tax and usually gets no employer retirement match or health insurance.
The customary rule of thumb is to add 25-30% to a salary figure to reach a comparable contract rate, and payroll tax is only part of the reason.
Results are estimates for general information only and are not professional financial, medical, or legal advice. Read our full disclaimer.
Sources
- Topic no. 751, Social Security and Medicare withholding rates · Internal Revenue Service
- Self-employment tax (Social Security and Medicare taxes) · Internal Revenue Service
Last updated: September 4, 2026