If you have ever looked at your paycheck and thought, “Wait, what is OASDI and why is Medicare on here too?”, you are not alone. Payroll taxes are one of the most common sources of paycheck confusion, mostly because they use a mix of acronyms and they show up in different places depending on your employer’s payroll system.

This guide breaks down how Social Security and Medicare payroll taxes work for 2026, what the wage caps and thresholds mean, and exactly what to look for on your paystub and W-2.

Quick 2026 note: The Social Security wage base (the annual cap for Social Security tax) is announced by the Social Security Administration, typically in late 2025 for the following year. If you are reading this before the official number is published, the rate is still 6.2%, but the cap is the key 2026 figure to confirm from SSA.

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Quick definitions: OASDI vs HI

Most W-2 employees pay these taxes under the umbrella term FICA (Federal Insurance Contributions Act). FICA has two main parts:

  • OASDI (Old-Age, Survivors, and Disability Insurance): This is the Social Security portion.
  • HI (Hospital Insurance): This is the Medicare portion (sometimes called “Medicare tax”).

On a paystub, you might see these as “Social Security,” “OASDI,” “FICA-SS,” “Medicare,” “HI,” or “FICA-Med.” Different payroll systems, same idea.

2026 FICA rates

For most employees, the tax rates are straightforward and do not change often:

  • Social Security (OASDI): 6.2% withheld from your pay, and your employer pays another 6.2%.
  • Medicare (HI): 1.45% withheld from your pay, and your employer pays another 1.45%.

So your paycheck typically shows 7.65% total withheld for these two items (6.2% + 1.45%), until you hit certain limits explained below.

A fast numbers example

If your paycheck has $1,000 of wages that are subject to both taxes, typical withholding is:

  • Social Security: $1,000 × 6.2% = $62.00
  • Medicare: $1,000 × 1.45% = $14.50

Total FICA withheld on that $1,000 is $76.50.

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Social Security wage base cap

Social Security has a maximum amount of wages that are subject to the 6.2% tax each year. This is called the Social Security wage base, also known as the contribution and benefit base.

What the cap does

  • You pay the 6.2% Social Security tax only on wages up to the wage base.
  • Once your year-to-date Social Security wages hit that cap, the Social Security withholding should stop for the rest of the year (for that employer).
  • Your Medicare tax does not stop at that point.

How it looks in real life

If you are a higher earner, you might notice a “raise” late in the year because your Social Security withholding disappears after you hit the wage base. Nothing magical happened. You just reached the cap.

If you change jobs: A new employer will start withholding Social Security again because they do not know what you already paid with a prior employer. If your combined wages end up above the wage base for the year, you may have overpaid and can usually claim the excess as a credit when you file your federal tax return.

If you work two jobs at the same time: Each employer withholds as if they are your only employer. Same result: it can cause an overpayment, and you typically claim the excess back at tax time.

Medicare: no cap

Medicare works differently than Social Security:

  • The standard 1.45% Medicare tax applies to all Medicare wages. There is no wage base cap.
  • Some people pay an additional 0.9% on higher earnings. That is the Additional Medicare Tax.

Additional Medicare Tax thresholds

The Additional Medicare Tax applies to wages above these thresholds:

  • $200,000 for Single
  • $250,000 for Married Filing Jointly
  • $125,000 for Married Filing Separately

Paycheck reality check: Employers are required to start withholding the Additional Medicare Tax once your wages from that employer exceed $200,000, regardless of your filing status.

  • If you are married filing jointly, you can still owe Additional Medicare Tax at filing time if your combined household wages exceed $250,000, even if neither employer withheld enough.
  • If your employer withholds the extra 0.9% because you personally went over $200,000, but your final tax threshold (based on your filing status and household income) is not met, you may get the excess back when you file.
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If you are self-employed

If you work for yourself, you do not pay FICA through an employer paycheck. Instead, you generally pay self-employment tax, which mirrors both the employee and employer shares:

  • 12.4% for Social Security (OASDI) up to the Social Security wage base
  • 2.9% for Medicare (HI) with no cap

That is 15.3% combined, before considering the Additional Medicare Tax rules for higher income.

Two details that matter:

  • Self-employment tax is generally calculated on 92.35% of your net self-employment earnings (not 100%), using IRS rules.
  • You can generally deduct half of your self-employment tax as an above-the-line adjustment on your federal return (it does not reduce the tax itself, but it can reduce your income tax).

Note: Self-employment tax is based on net earnings (after business expenses) and you typically pay through estimated quarterly taxes or when you file.

How to read your paystub

Paystubs vary a lot, but the core items tend to be the same. When you are checking whether your payroll taxes look right, focus on three things: the label, the current deduction, and the year-to-date (YTD) totals.

Common Social Security labels

  • Social Security
  • OASDI
  • FICA SS
  • FICA-OASDI

In a normal pay period, the Social Security line should be about 6.2% of your Social Security taxable wages for that pay period, until you hit the wage base cap.

Common Medicare labels

  • Medicare
  • HI
  • FICA Med
  • FICA-HI

The Medicare line is usually 1.45% of Medicare wages, with no cap.

Common Additional Medicare labels

  • Addl Medicare
  • Additional Medicare
  • Medicare Addl Tax

If this appears, the additional withholding should be 0.9% of wages above the applicable withholding trigger (usually after you cross $200,000 with that employer).

How it shows up on your W-2

Your W-2 is where things get clearer, because the IRS uses consistent box numbers.

Social Security on the W-2

  • Box 3: Social Security wages (this will max out at the Social Security wage base for the year)
  • Box 4: Social Security tax withheld (generally 6.2% of Box 3)

Medicare on the W-2

  • Box 5: Medicare wages and tips (often higher than Box 1 because some pre-tax deductions reduce federal taxable wages but not Medicare wages)
  • Box 6: Medicare tax withheld (generally 1.45% of Box 5, plus any Additional Medicare Tax withheld)
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Why Box 1 does not match Box 3 or 5

This trips people up every tax season. On your W-2:

  • Box 1 is your wages for federal income tax.
  • Box 3 and Box 5 are wages for Social Security and Medicare taxes.

They can differ because some benefits are treated differently for income tax vs payroll tax. Two common examples:

  • Traditional 401(k) contributions: Often reduce Box 1 wages, but usually still count in Box 3 and Box 5 (so they usually do not reduce FICA wages).
  • Section 125 “cafeteria plan” deductions (many employer health insurance premiums, some FSA contributions): Often reduce Box 1 and can also reduce Box 3 and Box 5 (so they can reduce FICA wages), depending on the plan setup.

If your boxes differ, it does not automatically mean something is wrong. It usually means you had pre-tax deductions that were treated differently across taxes.

Tips and FICA (quick note)

If you earn tips, those tips are generally subject to Social Security and Medicare tax too.

  • Tips you report to your employer are generally included in your Social Security and Medicare wages (often reflected in Box 7 for Social Security tips and in your Box 5 Medicare wages).
  • Because tips can be variable, withholding can look “uneven” across paychecks, especially if your base hourly wages are low and your reported tips are high.

Mini checklist

  • Social Security withholding is roughly 6.2% of Social Security wages and stops once you hit the yearly wage base (per employer).
  • Medicare withholding is roughly 1.45% of Medicare wages and keeps going all year.
  • Additional Medicare Tax may appear after wages exceed $200,000 with a single employer.
  • If you had two employers (or switched jobs) and your combined wages exceeded the Social Security wage base, you may have overpaid Social Security tax and can often claim it back on your return.

Common questions

Is FICA the same as federal income tax?

No. FICA is specifically for Social Security and Medicare. Federal income tax withholding is separate and depends on your W-4, income level, and filing status.

Do these taxes affect benefits?

Social Security uses your earnings record (up to the wage base each year) to help determine future benefits. The Medicare HI portion of payroll tax helps fund Medicare Part A, though Medicare overall is funded through multiple sources.

Can I opt out of Social Security and Medicare taxes?

Most employees cannot opt out. There are limited exceptions (for example, certain religious groups or specific public retirement systems), but they are not common and have strict rules.

Are there systems that are not FICA?

Yes. One notable example is Railroad Retirement (RRTA), which applies to many railroad employees instead of Social Security. It is a different system with its own withholding rules.

2026 numbers: what to confirm

To make sure you are working with the right 2026 figures, confirm these items from official sources:

  • Social Security wage base (contribution and benefit base) for 2026: published by the Social Security Administration each year.
  • FICA rates (6.2% Social Security, 1.45% Medicare): typically stable year to year unless changed by law.
  • Additional Medicare Tax thresholds: set in law and generally unchanged ($200k single, $250k MFJ, $125k MFS).

If you want a quick personal check, pull your last paystub of the year and compare it to your W-2:

  • Paystub YTD Social Security wages should roughly match W-2 Box 3.
  • Paystub YTD Medicare wages should roughly match W-2 Box 5.
  • Paystub YTD Social Security tax should roughly match W-2 Box 4.
  • Paystub YTD Medicare tax should roughly match W-2 Box 6.

Where to look: Check the SSA page for the annual contribution and benefit base and the IRS guidance for Additional Medicare Tax (Form 8959).

Bottom line

When you boil it down, payroll taxes are predictable:

  • OASDI (Social Security) is 6.2% up to a yearly wage base cap.
  • HI (Medicare) is 1.45% with no cap, plus a possible 0.9% Additional Medicare Tax for higher earners.

If you know what to look for on your paystub and W-2, you can spot errors faster, plan for higher-income thresholds, and feel a lot less “in the dark” about where your money is going.

If you want, send yourself a reminder to check your first paycheck of 2026. It is the easiest place to confirm the Social Security wage base update for the year once payroll systems roll it out.