FICA Tax – Social Security & Medicare

Social Security/Medicare taxable earnings are the total salary plus non-wage compensation, reduced by “pre-tax” deductions (examples of pre-tax deductions: dental, health, and vision insurance premiums, dependent care, flexible medical savings account, supplemental medical plan and pre-taxed parking. Complete list)

• Social Security
  • Social Security Tax or Old Age, Survivors and Disability Insurance (OASDI)
  • Withheld at a flat 6.2% of taxable gross
    • The wage base limit for the current calendar year can be found here.
• Medicare or Hospital Insurance (HI)
  • 1.45% of taxable gross with on up to $200,000
  • .9% applied on wages in excess of $200,000

Social Security and Medicare taxes are known collectively as FICA (the Federal Insurance Contributions Act).

Exemptions from FICA withholding

• Federal employees are exempt from social security taxes, but subject to Medicare taxes
• Certain foreign nationals in nonresident tax status; typically F-1 and J-1 students in their first five years in the United States, and J-1 researchers in their first two years in the United States
• Students enrolled at least half time credit hours in the current semester and working less than 30 hours per week
  • Undergraduates
    Enrolled 6 credit hours or more in the fall/spring semesters
    Enrolled 3 credit hours or more in each summer session
  • Graduates
    Enrolled 3 credit hours or more in the fall/spring semesters
    Enrolled 1 credit hour or more in each summer session
  • Graduated and Undergraduates enrolled in 10-week summer courses are exempt in both summer sessions.

Bi-weekly FICA exemption calendar by pay period

It is important to note, that anyone exempted from social security taxes:

• Is not eligible to apply for unemployment benefits and
• Is not eligible to receive social security service credit toward retirement for that time worked.