If you don’t usually look at your pay-stub, take a look at your most recent one now. Look at the gross amount you received this pay period and multiply that by 7.65% and that amount should match the number that says FICA or FICA tax. I just double checked my last pay-stub and yep, it matches exactly.
So what is FICA tax? Wikipedia defines it as, “a United States Federal payroll (or employment) tax imposed on both employees and employers to fund Social Security and Medicare”. Basically, it’s where our Social Security and Medicare money comes from.
6.2% of FICA tax is for Social Security and 1.45% is for Medicare. If you’re self-employed, you have to pay double the amount (15.3%) because you’re covering the employee and the employer portion for yourself.
If you made over $113,700 in 2013, it gets a little tricky. And thanks to Obama Care, if you made over $200,000 in 2013, it gets even trickier. Since most of us millennials aren’t making that much just yet, I’ll save that calculation for another day.