FICA tax is a combination of a Social Security tax and a Medicare tax. The Social Security tax is assessed on wages up to $142,800 ($137,700 in 2020); the Medicare tax is assessed on all wages.
Self-employed individuals pay a self-employment tax which is the equivalent of FICA tax. For 2021, they will pay a 15.3% OASDI tax (the old age, survivors, and disability insurance tax) on the first $142,800 ($137,700 in 2020) of self-employment income. A 2.9%* Medicare tax is imposed on all net self-employment income.
The earnings limit for retirees under full retirement age is $18,960 ($18,240 in 2020). Social Security benefits will be reduced $1 for every $2 of earnings above this limit. There is no earnings limit for individuals at full retirement age. (Special rules apply in the first year of retirement.)
Social Security Medicare
Tax Maximum Tax Rate:
Social Security 6.2%
Medicare 1.45% *
Maximum Wage Base:
Social Security $142,800
Medicare No ceiling
* A 0.9% Medicare surtax is assessed on all wages or self-employment income in excess of $200,000 for singles, $250,000 for joint returns, and $125,000 for those married filing separately.