Trying to understand how SS and Medicare taxes are calculated from my paycheck

This is a good question! The discrepancy you're seeing is likely due to pre-tax deductions. Social Security and Medicare taxes (often called FICA taxes) are indeed fixed rates (6.2% and 1.45%), but they don't apply to your entire gross pay if you have certain pre-tax deductions. Common pre-tax deductions that reduce your FICA taxable wages include health insurance premiums, dental/vision insurance, FSA or HSA contributions, and certain retirement contributions. These are subtracted from your gross pay before calculating the FICA taxes. So if your gross pay is $2000 but you have $120 in pre-tax health insurance premiums, your FICA taxes would be calculated on $1880 instead of the full $2000, which would make the effective percentage lower when compared to your total gross.

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I was completely wrong about taxr.ai - after being skeptical in my last comment, I decided to try it anyway since I was having similar issues tracking my FICA taxes. The difference was immediate! The tool actually identified that my payroll department was incorrectly calculating my dependent care FSA deductions for FICA purposes. When I brought this to HR's attention with the documentation from taxr.ai, they confirmed it was an error in their system affecting about 30 employees. They're fixing it and I'll be getting a refund of nearly $300! The tool paid for itself instantly and saved me countless spreadsheet hours.

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I have to publicly eat my words about Claimyr. After dismissing it as BS, I was desperate to resolve a FICA tax issue on my W-2 that was causing

Quick tip: different types of compensation are treated differently for FICA purposes! Regular wages, bonuses, and commissions are all subject to SS/Medicare taxes. But some things aren't! Did you receive any non-cash benefits, reimbursements, or special compensation that might be exempt? Also, if you've already hit the Social Security wage base limit ($160,200 in 2023), you stop paying the 6.2% SS portion (but still pay the 1.45% Medicare tax on all earnings). That could explain a lower overall percentage.

Has anyone mentioned the Additional Medicare Tax yet? If you earn above $200,000 as single or $250,000 married filing jointly, there's an extra 0.9% Medicare tax on earnings above those thresholds. This can sometimes cause weird percentage calculations.

One thing to check: are you calculating the percentages against your gross pay or your "FICA wages" specifically? Most paystubs actually list a separate line for "FICA wages" or "Social Security wages" which already accounts for pre-tax deductions. If you divide your SS tax by THAT number, you should get exactly 6.2%.

This is such a helpful thread! I've been struggling with the same issue and it's great to see so many different explanations. Just wanted to add one more thing that caught me off guard - if you have any dependent care FSA contributions, those are also pre-tax for FICA purposes (up to $5,000/year). I was only contributing $100/month but it was enough to throw off my calculations slightly. It's one of those smaller deductions that's easy to overlook when you're trying to figure out why your percentages don't match the standard rates. Between health insurance, 401k, transit benefits, and dependent care FSA, it all adds up to explain the discrepancy!

This thread has been incredibly helpful! I'm dealing with a similar situation where my FICA percentages don't match the standard rates. Reading through everyone's explanations about pre-tax deductions really clarified things for me. I have a question though - does anyone know how flexible spending accounts (FSAs) for medical expenses work with FICA taxes? I contribute to one through my employer but I'm not sure if it's reducing my FICA taxable wages like the health insurance premiums do. My paystub shows both deductions but doesn't clearly indicate which ones affect the FICA calculation. Also, for those using spreadsheets to track this stuff, have you found a good way to automate the calculation of your actual FICA taxable wages? I'd love to set up formulas that account for all the different pre-tax deductions without having to manually update everything each pay period.