Easiest FICA Tax Calculator

Whats FICA?

Before you test the FICA tax calculator on this page, you should understand “what is a FICA tax ?”. The FICA meaning is Federal Insurance Contribution Act. Under this law, before making wage payments to a person, every employer will first ensure a specific amount of withholding from his/her wages as a contribution to social security funds.

Not only will the amount be withheld from an employee, but the employer will also contribute an equal amount to the social fund for the employee’s social security benefits and Medicare health insurance. Since the law requires the employer to withhold FICA taxes from the salary/wages of employees, It is considered social security withholding tax. Are FICA taxes Social Security Tax? Yes, because the FICA tax has two parts. The first part is 6.2% of employees’ taxable gross wages is the Social Security tax part.

FICA tax Calculator 2022 & 2023

What are FICA tax rates for 2022 & 2023?

The FICA tax rate for 2022 is the same as for 2021. In other words, for 2022 & 2021, the FICA tax rate is 15.30%, split equally between the employer and employee. So Employer deducts the FICA tax of 7.65%. (6.2% for Social Security and 1.45% for Medicare) from wages of an employee and deposits, the combined contribution (its own 7.65%) totaling 15.3%.

What is the 2023 wage limit for FICA tax?

The federal government increased the limit for Social Security tax to $160,200 (up from $147,000 in 2022). The maximum amount of Social Security tax an employee will have withheld from their paycheck in 2023 will be $9,932 ($147,000 x 6.2%) and $9,114 ($147,000 x 6.2%) in year 2022.

How to calculate FICA tax?

Calculating FICA taxes contribution for an employee is easy. The FICA tax calculator is based on multiplying the gross pay by the Social Security and Medicare tax rates. For example,

• The taxable wages of Mr Richard is $900 for the week
• Employer will deduct social security contribution would be $900.00 x 6.2% = $55.80.
• Further, the deduction for Medicare contribution would be $900.00 x 1.45%= $13.05. 
• So, the total deduction from Mr Richard’s wages would be $55.80+$13.05= $66.85.
• The employer would also have to pay equally, i.e. $66.85 of FICA tax.

Who needs to pay additional Medicare tax?

Under the Affordable Care Act, the IRS introduced an Additional Medicare Tax in 2013. This additional Medicare tax is applicable only if the combined earnings from Medicare wages and self-employment income exceeds the threshold given below :

The threshold for additional Medicare -2022 & 2023

Filing Status	2022	2023
Head of household	200000	200000
Married filing jointly	250000	250000
Married filing separate	125000	125000
Qualifying widow(er)	250000	250000
Single	200000	200000

However, the law for withholding additional medicare tax by an employer applies when your wages exceed $200,000. It means that even if your earnings per your filing status do not cross the threshold if your wages with an employer exceed $200,000, additional medicare tax must be withheld @ 0.9%.

Who Needs to File Form 8959 for Additional Medicare Tax?

If you are subject to additional Medicare tax withholding, you must file Form 8959. In other words, if the employee is getting wages plus tips is more than $200,000 (Refer to your W-2 form). Form 8959 informs IRS about the amount of Additional Medicare Tax you owe and if the employer withholds any amount of Additional Medicare Tax for you.

You must also file Form 8959 if your total Medicare wages and tips plus your self-employment income, if any, are greater than the threshold amount as per your filing status [refer to the table above]. You can read IRS instructions on form 8959

Is FICA Taxes Paid by Self Employed Persons?

When you’re self-employed, you need to pay both employee and employer taxes. The term used is self-employment tax. In other words, a self-employed person has to pay 12.4% for Social Security Tax and 2.9% for Medicare Tax. And if you’re a high wage earner, you’ll still have to pay the 0.9% Additional Medicare Tax above your earnings threshold. Please read more on a self-employment tax calculator with faqs .

How do you calculate the Additional Medicare Tax if you get Medicare wages and earn freelancing income?

The aforesaid FICA tax calculator is only for Medicare wage earners. However, there may be cases when a person working somewhere as an employee also carries on his own freelancing or some business. In that case, the FICA tax computation may be slightly different. Follow the steps to compute additional Medicare tax on your income.

1. Calculate 0.9% of the Additional Medicare Tax only if the wages you earned exceed the applicable threshold for the taxpayer’s filing status.
2. Deduct the applicable threshold for the filing status from the total amount of Medicare wages received. If the net result is negative, consider it zero.
3. Calculating the Additional Medicare Tax on any self-employment income over the reduced threshold.

How is Medicare withholding calculated?

Medicare withholding is calculated based on the employee’s gross pay and a fixed percentage of 1.45%. This means that 1.45% of the employee’s gross pay is deducted and paid directly to Medicare.

For example, if an employee earns a gross salary of $2,500 per month, their Medicare withholding would be calculated as follows:

$2,500 x 1.45% = $36.25

So, the employee’s Medicare withholding for that month would be $36.25, which would be deducted from their gross pay and paid to Medicare. It’s important to note that the employer also contributes an additional 1.45% of the employee’s gross pay to Medicare, making the total Medicare contribution 2.9%.

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