What is FICA? FICA stands for Federal Insurance Contributions Act, which includes Social Security tax and Medicare Part A tax.
W-2 Employees: FICA tax is split evenly—you pay 7.65%, and your employer pays 7.65%.
1099 Contractors / Self-Employed: You are responsible for the full 15.3% FICA tax (12.4% for Social Security + 2.9% for Medicare Part A).
After Retirement: If your income comes from 401(k)/IRA distributions, rental income, dividends, or Social Security benefits, you do not pay FICA tax on these sources. However, you may still owe federal income tax depending on your total income and tax bracket.
Still Working After Retirement? If you earn active income—such as from part-time jobs, contracting, consulting, or real estate commissions—you must continue paying FICA tax on that income.
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