FICA is two taxes. Social Security is 6.2% from the employee and 6.2% from the employer on wages up to the annual wage base ($184,500 for 2026). Medicare is 1.45% each on all wages, with no limit, plus an Additional Medicare tax of 0.9% withheld from the employee only on wages over $200,000 in the year (IRC §§3101, 3111). The employer’s share is a real labor cost and part of labor burden.
Why it matters
Burden rates that ignore the wage base overstate cost for high earners late in the year; burden that ignores FICA entirely understates every hour of labor on every bid.
Worked example
An employee with $183,000 of Social Security wages year to date earns $3,000 this check. Only $1,500 is under the 2026 wage base: Social Security is $93.00 from each side. With $199,000 of Medicare wages to date, Additional Medicare applies to the $1,000 above $200,000: $9.00, employee only (illustrative).
Common mistakes
- Withholding employer-only taxes from the employee.
- Forgetting that pre-tax 401(k) deferrals are still FICA wages.
How os.construction handles it
In the accounting preview’s payroll model, FICA is calculated per check with each wage base tracked year to date and rounded half-up to the cent per tax. See Payroll.