Most pay stubs show at least two federal lines, and readers often add them together and call the total income tax. That total is wrong as a description, because the two lines are different taxes, calculated on different bases, at different kinds of rates, and sent to different purposes.
The calculator shows federal tax and FICA on separate lines for exactly this reason. This guide explains what each line is.
Side by side, before any example
| Payroll tax, FICA | Federal income tax | |
|---|---|---|
| Parts | Social Security, 6.2 percent, plus Medicare, 1.45 percent | One tax, at bracket rates from 10 to 37 percent |
| Rate shape | Flat, until the Social Security wage base | Progressive, by slices of taxable income |
| Base | Wages after pre-tax health premiums, before the standard deduction | Taxable income, after pre-tax deductions and the standard deduction |
| What it funds | Social Security benefits and Medicare health coverage | General federal spending, under income tax law |
| Employer share | Employer pays a matching 6.2 percent plus 1.45 percent | No employer match, the employee's tax only |
The employer match is the line most readers never see on a stub, because it is not taken from the employee's pay. For an employee, the combined FICA rate is 7.65 percent. With the employer match, the combined FICA rate is 15.3 percent. A self-employed person generally pays both shares as self-employment tax, which is why a freelancer's tax picture looks so different from an employee's at the same income. This guide gives general information only, not a determination for an individual return.
Why the bases differ
Payroll tax starts from wages, with only a few pre-tax items removed, and it does not subtract the standard deduction. Income tax starts later, after pre-tax deductions and after the standard deduction or itemized deductions. That is why income tax can be lower than payroll tax at a low salary, even though its top rate is far higher: the standard deduction shelters a slice of income from income tax entirely, while payroll tax applies from the first dollar of wages.
Social Security also stops, in a way income tax never does. Once wages pass the 2026 wage base of 184,500 dollars, no further Social Security tax is taken for that employer for that year, and later paychecks rise. Medicare has no wage cap, and an additional 0.9 percent Medicare tax applies above 200,000 dollars for a single filer, 250,000 dollars joint, and 125,000 dollars separate. Income tax has no cap and no stopping point of that kind.
A 60,000 dollar example, both taxes together
Take a single filer earning 60,000 dollars, with no pre-tax deductions, so FICA wages are 60,000 dollars and federal taxable income is 60,000 minus the 16,100 dollar standard deduction, which is 43,900 dollars. Payroll tax is Social Security at 6.2 percent of 60,000 dollars, which is 3,720 dollars, plus Medicare at 1.45 percent of 60,000 dollars, which is 870 dollars, for a total of 4,590 dollars.
Federal income tax is 10 percent of the first 12,400 dollars, which is 1,240 dollars, plus 12 percent of the slice from 12,400 to 43,900 dollars, which is 31,500 dollars times 12 percent, or 3,780 dollars. The total is 5,020 dollars. At this salary the two taxes are close in size, 4,590 dollars against 5,020 dollars, but they arrived there by completely different routes. At a lower salary, payroll tax can exceed income tax. At a much higher salary, income tax pulls well ahead, because its brackets keep applying while Social Security stops at the wage base.
Where readers go wrong
The first error is calling the whole federal section income tax, which hides the Social Security and Medicare lines. The second is expecting a change in one tax to change the other: raising a 401k contribution, for example, can reduce federal taxable income without reducing FICA wages at all, as the smaller-paycheck guide shows. The third is comparing a freelancer's 15.3 percent self-employment rate with an employee's 7.65 percent and concluding the freelancer is taxed twice, when the freelancer is paying both the employee and employer shares that an employer pays separately for an employee.
FAQs
Is FICA the same as federal withholding?
No. Federal withholding is the income tax line, estimated from your W-4. FICA is Social Security plus Medicare, at fixed rates, and it is shown separately on most stubs.
Does my employer really pay FICA too?
Yes. An employer generally pays a matching 6.2 percent Social Security and 1.45 percent Medicare on employee wages, in addition to the amounts withheld from the employee.
Why does Social Security stop but Medicare does not?
Social Security tax applies only up to an annual wage base, set at 184,500 dollars for 2026. Medicare has no wage cap, and the additional Medicare tax applies above its thresholds instead of stopping.