Look at your pay stub and the number at the top is not the number that hits your bank account. Some of the gap is income tax. But two of the biggest lines are labeled Social Security and Medicare, and unlike income tax, most people have no idea what they are, where the money goes, or why they cannot turn them off.
They are not fees. They are not your employer keeping a cut. They are you paying into two federal programs that you — or people you support — will draw from later. Here is how they work.
What the two lines actually are
Together, these two taxes are called FICA — the Federal Insurance Contributions Act. Congress created Social Security in 1935 and Medicare in 1965, and the law requires that both come out of nearly every paycheck earned in the United States. That is why they are not optional and not something you elect into on a form.
Social Security funds retirement checks, disability benefits, and payments to the surviving spouses and children of workers who die. Medicare funds hospital coverage for people once they turn 65. The through-line for both: you pay in while you are working, and you draw out later — or someone in your family does.
How much comes out
Social Security is 6.2% of your pay, and Medicare is 1.45%. Added together, that is 7.65% of your wages — the single biggest reason your take-home is smaller than your salary, ahead of income tax for a lot of workers.
Social Security has a ceiling. In 2026 you pay the 6.2% only on your first $184,500 of wages; earn more than that in a year and the Social Security line stops appearing on your later paychecks. The most anyone pays into Social Security in 2026 is $11,439. Medicare has no ceiling — the 1.45% applies to every dollar you earn, all year.
There is one add-on at the high end. Once your wages pass $200,000 in a year, an extra 0.9% Additional Medicare Tax comes out of the amount above that line. If you never cross $200,000, it never touches you.
Your employer pays too — and it is not on your stub
The 7.65% you see is only half of it. Your employer is required by law to match your Social Security and Medicare dollar for dollar — another 6.2% and 1.45% that never appears on your pay stub because it does not come out of your check. In total, 15.3% of your wages goes into these two programs; you see half and pay half.
This is why being self-employed feels different at tax time. A self-employed person is both the worker and the employer, so they owe the whole 15.3% themselves — the same tax, just without an employer covering the other half.
What you are actually buying
It helps to think of FICA as insurance you are paying premiums on now, not a savings account with your name on it. The dollars withheld this year largely pay the benefits of people who are retired or disabled today. When it is your turn, the workers behind you fund yours.
What you build up is a record. Social Security tracks how much you have earned and paid in over your career, and that record determines the size of your future retirement or disability check. The Medicare taxes you pay across your working life are what let you enroll in Medicare hospital coverage at 65 without paying a monthly premium for it. Stop paying in entirely and those future benefits shrink or disappear — which is a large part of why the law does not let you opt out.
Where to find it on your pay stub
On a Payrollix pay stub, these show up in the taxes section as two separate lines: Social Security (FICA) and Medicare, each with the amount taken out this period and the running year-to-date total next to it. If your wages are high enough, you will also see an Additional Medicare line once you cross the $200,000 mark for the year.
None of it is discretionary and none of it is a mistake in your favor or against you — it is the same 6.2% and 1.45% applied to everyone, calculated the same way on every check. If a number ever looks off, the year-to-date column is the place to start, because that is what caps and thresholds are measured against.
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