2027 FICA Tax Rates — Unchanged by Statute
| Tax Component | Employee Withholding | Employer Match | Self-Employed (SECA) |
|---|---|---|---|
| Social Security (OASDI) | 6.2% | 6.2% | 12.4% |
| Medicare (Hospital Insurance) | 1.45% | 1.45% | 2.9% |
| Total Baseline FICA | 7.65% | 7.65% | 15.3% |
Social Security Wage Base (Projected)
| Detail | 2027 Projected | 2026 Confirmed | Statutory Notes |
|---|---|---|---|
| Taxable Wage Base Limit | ~$190,200 | $184,500 | Tied to National Average Wage Index (AWI) |
| Max Employee Social Security Tax | ~$11,792.40 | $11,439.00 | 6.2% applied up to wage base cap |
| Max Employer Social Security Tax | ~$11,792.40 | $11,439.00 | Dollar-for-dollar employer matching |
| Max Combined (W-2 Employee + Employer) | ~$23,584.80 | $22,878.00 | 12.4% total OASDI contribution |
Additional Medicare Tax Thresholds — Fixed by Statute
The Additional Medicare Tax of 0.9% under IRC § 3101(b)(2) applies exclusively to employee and self-employment earnings exceeding statutory limits. Employers do not match this surtax:
| Filing Status | Statutory Threshold | Additional Rate | Employer Matching |
|---|---|---|---|
| Single / Head of Household / Qualifying Surviving Spouse | $200,000 | 0.9% | None (Employee only) |
| Married Filing Jointly | $250,000 | 0.9% | None (Employee only) |
| Married Filing Separately | $125,000 | 0.9% | None (Employee only) |
Withholding is not the final tax: each employer begins Additional Medicare Tax withholding when it pays you more than $200,000, regardless of filing status or your spouse’s wages. Your return reconciles total Medicare wages and self-employment earnings against your filing-status threshold on Form 8959. See IRS Additional Medicare Tax guidance.
Household payroll: the 2027 cash-wage coverage threshold is still pending. For comparison, the IRS confirms $3,000 for 2026: paying that amount or more to one household employee generally subjects all their cash wages to FICA, with family-member and age exceptions. Do not reuse the older $2,900 threshold for 2027 payroll.
Explore the self-employment calculator’s 2025 tax assumptions. It does not yet apply this page’s 2027 estimated wage base.
Open Self-Employment Tax Calculator →What Changed From 2026: Side-by-Side Summary
The table below summarizes statutory 2027 FICA payroll rates and projected wage thresholds compared with confirmed 2026 parameters under SSA OASDI Determinations.
| Provision / Tax Parameter | 2026 Confirmed | 2027 Projected | Change |
|---|---|---|---|
| Social Security Tax Rate (Employee / Employer) | 6.2% | 6.2% | — Fixed by statute |
| Medicare Tax Rate (Employee / Employer) | 1.45% | 1.45% | — Fixed by statute |
| Combined FICA Rate (Employee) | 7.65% | 7.65% | — Fixed by statute |
| Social Security Taxable Wage Base Limit | $184,500 | ~$190,200 | ↑ +$5,700 (+3.1%) |
| Maximum Social Security Tax (Employee W-2) | $11,439.00 | ~$11,792.40 | ↑ +$353.40 (+3.1%) |
| Maximum Social Security Tax (Self-Employed) | $22,878.00 | ~$23,584.80 | ↑ +$706.80 (+3.1%) |
| Additional Medicare Surtax (Single over $200k) | 0.9% | 0.9% | — Fixed threshold |
2026 vs 2027 Social Security Wage Base & Max Taxes
| Metric | 2026 | 2027 Projected |
|---|---|---|
| Wage Base Ceiling | $184,500 | $190,200 |
| Max Employee OASDI | $11,439 | $11,792.40 |
| Max Self-Employed OASDI | $22,878 | $23,584.80 |
Worked Example: W-2 vs. 1099 Self-Employed on $220,000 Income
Suppose Taylor is a single filer with either $220,000 of W-2 wages or $220,000 of self-employment net profit after business expenses in 2027, with no other wages or self-employment income. Using the SSA Trustees’ estimated $190,200 wage base gives the following illustration; it excludes income tax and is not a comparison of equal employer costs:
Scenario A: W-2 Employee
- Social Security Tax (6.2%): Capped at $190,200 wage base →
$190,200 × 6.2% = $11,792.40. - Medicare Tax (1.45%): Applies to all $220,000 →
$220,000 × 1.45% = $3,190.00. - Additional Medicare Surtax (0.9%): Applies to wages over $200,000 ($20,000) →
$20,000 × 0.9% = $180.00. - Total W-2 Employee Payroll Tax:
$11,792.40 + $3,190 + $180 = $15,162.40.
Scenario B: 1099 Independent Contractor (Self-Employed)
- SE Tax Base (92.35%):
$220,000 × 92.35% = $203,170.00. - Social Security Portion (12.4%): Capped at $190,200 →
$190,200 × 12.4% = $23,584.80. - Medicare Portion (2.9%): Applies to full SE base ($203,170) →
$203,170 × 2.9% = $5,891.93. - Additional Medicare Surtax (0.9%): Applies to SE base over $200,000 ($3,170) →
$3,170 × 0.9% = $28.53. - Total SECA Tax:
$23,584.80 + $5,891.93 + $28.53 = $29,505.26. - Above-the-Line Deduction: Taylor deducts 50% of the baseline SE tax (
$29,476.73 ÷ 2 = $14,738.37) on Schedule 1 to lower federal taxable income.
Wages plus a side business: for a single filer with $180,000 of Social Security wages and $30,000 of net business profit, the SE tax base is $30,000 × 92.35% = $27,705. Under the estimated $190,200 wage base, only $10,200 of room remains for Social Security tax: $10,200 × 12.4% = $1,264.80. Regular Medicare on the side business is $27,705 × 2.9% = $803.45. Combined Medicare wages and SE earnings are $207,705, producing $7,705 × 0.9% = $69.35 of Additional Medicare Tax. This example assumes no other earnings or adjustments and rounds to cents.
Who This Affects — and Who It Doesn't
- High Earners ($184.5k–$190.2k+): Pay 6.2% Social Security tax on an additional $5,700 of wages in 2027 ($353.40 extra tax).
- Self-Employed Professionals & Freelancers: Generally apply SECA to 92.35% of net profit, with the Social Security cap and Additional Medicare Tax rules applied separately.
- Employers & Payroll Managers: Budget using the $190,200 estimate, then configure withholding with the final SSA amount once announced.
- Multiple W-2 Job Holders: May experience excess Social Security tax withholding eligible for a Form 1040 tax credit.
- Workers Earning Under $184,500: Continue paying the exact same 7.65% FICA rate on all earnings with no bracket change.
- Passive Investment Income: Interest, dividends, and capital gains are exempt from FICA (potentially subject to NIIT instead).
- S-Corporation Shareholder Distributions: Non-wage profit distributions bypass FICA/SECA taxes.
- State & Local Government Workers in 218 Opt-Out Plans: Covered under qualifying state pension systems in lieu of Social Security.
Tax Planning & Payroll Strategies for 2027
1. S-Corporation Reasonable Compensation Optimization: Business owners operating through an S-Corp can pay themselves a W-2 "reasonable salary" (subject to Social Security and Medicare payroll taxes) while taking remaining net profits as distributions, provided payments for services have first been treated as reasonable wages; distributions cannot be used to disguise compensation.
2. Claiming Multiple Employer Overwithholding: If you switch jobs mid-year or work for two employers whose combined wages exceed ~$190,200, both employers will withhold Social Security up to the cap. Generally claim excess employee Social Security withholding from multiple employers on Schedule 3 with Form 1040, using the applicable year’s instructions. If a single employer overwithheld, request its correction first.
3. Utilize Section 125 Pre-Tax Deductions: Pre-tax payroll deductions for health insurance, HSAs, and FSAs lower both federal income tax and FICA taxable wages, subject to each benefit’s eligibility rules. Payroll-tax savings vary with wages relative to the Social Security cap and Additional Medicare Tax thresholds; ordinary 401(k) deferrals do not reduce FICA wages.
Source: SSA 2026 COLA fact sheet (2026 OASDI contribution and benefit base). FICA rates themselves are set by statute at IRC §§ 3101 and 3111. The $190,200 wage base comes from the 2026 SSA Trustees Report, Table V.C1, intermediate assumptions. It is an official estimate, not the final 2027 determination. Derived maximum taxes are $190,200 × 6.2% or 12.4%. SSA normally releases the final wage base with the October COLA announcement; it is wage-indexed, not obtained by applying the COLA percentage.
Frequently Asked Questions
What are the projected 2027 FICA tax rates?
FICA tax rates are set by federal statute and remain unchanged: 6.2% for Social Security and 1.45% for Medicare, totaling 7.65% for employees and matched equally by employers (15.3% combined).
What is the projected 2027 Social Security wage base?
The 2026 SSA Trustees’ intermediate estimate is $190,200 for 2027, compared with the confirmed $184,500 for 2026. The final 2027 wage base is pending. Its formula uses the national average wage index, not the benefit COLA percentage.
What is the maximum Social Security tax an employee will pay in 2027?
At a 6.2% rate on the projected ~$190,200 wage base, the maximum Social Security tax withheld from a single W-2 employee is projected at ~$11,792.40 (up from $11,439.00 in 2026).
What are the Additional Medicare Tax thresholds for 2027?
The 0.9% Additional Medicare Tax applies to wages and self-employment earnings exceeding statutory thresholds of $200,000 for Single and Head of Household filers, $250,000 for Married Filing Jointly, and $125,000 for Married Filing Separately. These thresholds are fixed by law and not indexed for inflation.
How is Self-Employment Contributions Act (SECA) tax calculated in 2027?
Generally, 92.35% of net business profit is subject to regular SE tax: 12.4% Social Security up to the remaining wage base and 2.9% Medicare without a cap. The 2027 wage base is estimated at $190,200. W-2 Social Security wages use that same cap first; Additional Medicare Tax is calculated separately.
Is the employer matching portion of FICA deductible for businesses?
Yes. Employers can deduct their 7.65% matching share of FICA payroll taxes as an ordinary and necessary business expense under IRC § 162.
Can self-employed taxpayers deduct half of their SECA tax?
Generally, half of the regular self-employment tax is deductible as an adjustment on Schedule 1. The 0.9% Additional Medicare Tax is excluded from that deduction, as illustrated above.
What happens if an employee works two jobs and overpays Social Security tax?
If combined wages from multiple employers exceed the ~$190,200 wage base, each employer will withhold 6.2% up to the cap. The excess Social Security tax withheld is claimed as a refundable credit on Form 1040 when filing the annual return.
Does the Medicare tax have an upper income limit?
No. The standard 1.45% employee Medicare tax applies to all wages without any cap, and high earners pay an additional 0.9% surtax on earnings above $200k ($250k MFJ).
When does an employer begin withholding the 0.9% Additional Medicare Tax?
Employers are required to begin withholding the 0.9% surtax in the pay period when an employee's cumulative year-to-date wages with that employer exceed $200,000, regardless of the employee's marital filing status.
How does pre-tax health insurance impact FICA tax?
Contributions to Section 125 Cafeteria plans (such as employer health insurance, FSAs, and HSAs through payroll) are exempt from both FICA taxes and federal income tax, directly reducing taxable payroll wages.
Do traditional 401(k) contributions reduce FICA tax?
No. Traditional 401(k) and 403(b) contributions reduce federal and state income taxes, but they remain fully subject to FICA (Social Security and Medicare) payroll taxes.
How do S-Corporation owner-employees manage FICA tax?
S-Corp shareholder-employees pay FICA taxes (15.3% combined) only on their W-2 'reasonable compensation,' while remaining business profits distributed as shareholder distributions are exempt from FICA and SECA taxes.
When will the official 2027 Social Security wage base be announced?
The Social Security Administration officially announces the next year's OASDI contribution and benefit base in mid-October, concurrent with the annual COLA release.
Are tips subject to FICA tax?
Generally, cash tips totaling $20 or more from one job in a calendar month must be reported to the employer and are subject to FICA. An eligible federal income-tax deduction for tips or overtime does not make the underlying wages exempt from payroll tax.
Do household employers have to pay FICA tax for domestic workers in 2027?
The 2027 household-employee cash-wage threshold is pending. The confirmed 2026 threshold is $3,000 or more paid to one employee during the year, generally making all their cash wages subject to Social Security and Medicare taxes. Family-member and age exceptions apply; check the final 2027 threshold before running payroll.
Explore paycheck scenarios using the calculator’s supported tax year; its results do not automatically incorporate these 2027 estimates.
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How this page is reviewed
See methodology, assumptions & sources
| Risk tier | High YMYL |
|---|---|
| Author | Calculover Editorial Team Finance and legal education |
| Editorial owner | Calculover Tax & Payroll Desk Tax and wage methodology owner |
| Reviewer | Calculover Editorial Review High-risk source and limitation review |
| Status | Official estimate |
| Source as of | 2026-09-07 |
| Last reviewed | 2026-09-07 |
| Last verified | 2026-09-07 |
| Next review date | 2026-11-15 |
| Expected release | SSA 2027 wage base: October 2026; IRS/SSA payroll guidance: late 2026 |
| Projection method | Statutory 6.2% Social Security and 1.45% Medicare employee rates are unchanged. Tables and worked examples use the SSA Trustees’ $190,200 intermediate wage-base estimate, not a final determination. The final 2027 wage base and household-worker threshold remain pending. |
| Data effective date | 2027-01-01 |
Methodology
Statutory 6.2% Social Security and 1.45% Medicare employee rates are unchanged. Tables and worked examples use the SSA Trustees’ $190,200 intermediate wage-base estimate, not a final determination. The final 2027 wage base and household-worker threshold remain pending.
Assumptions
- This is a reference article with fixed worked examples. Assumptions are stated beside each example; the page does not collect or verify personal financial inputs.
- Agency estimates and editorial scenarios are labeled separately from confirmed rules and must not be treated as final 2027 filing amounts.
- Linked calculators may support a different tax year; their displayed year and assumptions control their results.
Limitations
- The examples do not determine an individual’s final liability, benefit, eligibility or optimal financial decision. State rules and personal circumstances may change the result.
- Check the current primary-source release and applicable year before making a contribution, filing a return, or changing benefits.
Sources
- 2026 Trustees Report table V.C1, Social Security Administration
- Employer tax guide, Internal Revenue Service
- Household employment taxes, Internal Revenue Service
Professional guidance: 2027 FICA Tax Rates & Social Security Wage Base (Projected) is for tax education and planning only and is not tax, legal, accounting, or filing advice. Verify current rules with the relevant tax authority or a qualified tax professional.