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Is FICA the same as Social Security?

No, but they are closely connected. FICA, the Federal Insurance Contributions Act, refers to the taxes that largely fund Social Security retirement, disability, survivor, spousal and children’s benefits. FICA taxes also provide a chunk of Medicare’s budget. 

Most workers have FICA taxes withheld directly from their paychecks. These deductions claim 6.2 percent of an employee’s gross pay for Social Security, up to an income threshold commonly termed “maximum taxable earnings.” In 2023, the threshold is $160,200; any earnings above that are not subject to Social Security taxes. The limit is adjusted annually based on national changes in wage levels. 

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There is no comparable earnings maximum for Medicare; the 1.45 percent Medicare tax included in FICA is levied on all of your work income. Employers match workers’ Social Security and Medicare contributions.

Keep in mind

  • Self-employed people pay into Social Security and Medicare through a different tax, called SECA (Self-Employment Contributions Act) and collected via their annual federal tax returns. They pay both the employer and employee shares.
  • FICA and SECA taxes do not fund Supplemental Security Income (SSI) benefits. Those are paid out of general tax revenues (although the program is administered by the Social Security Administration).

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