How FICA and unemployment tax are calculated
Payroll tax in the United States is split between two FICA components. Social Security (OASDI) is charged on wages only up to an annual wage base that is indexed every year, so high earners stop paying it partway through the year. Medicare has no wage cap. Both are matched dollar for dollar by the employer, which is why the combined cost to an employer is roughly double what appears on the pay stub.
On top of that, an Additional Medicare Tax applies to wages above a threshold that depends on filing status. It is withheld from the employee only, with no employer match, and the thresholds are fixed in statute rather than indexed, so more workers cross them over time. Employers separately pay federal and state unemployment tax, each on its own small wage base, with the state rate set by the employer's experience rating.
The rates shown are on a 2026 basis. The wage base, FUTA credit position and state rate are entered as editable fields because they change annually and by state; confirm current figures in IRS Publication 15 and with your state workforce agency. A self-employed person pays both halves through SECA on Schedule SE instead.
This is an estimate, not a payroll filing. Pre-tax benefits, retirement deferrals, tips, multiple employers and state disability programs all change the result. Confirm with your payroll provider or CPA.
Frequently asked questions
Because your year-to-date wages passed the Social Security wage base. Medicare keeps being withheld, since it has no cap, and Social Security restarts in January.
No. The employer withholds it once wages pass the threshold but pays no matching share. It is also reconciled on your return, where the threshold depends on your combined filing status income.