FICA payroll taxes: what small employers owe in 2026
FICA is the payroll tax behind Social Security and Medicare. Here is the plain-English version for small employers, with the 2026 and 2027 numbers, the deposit and filing clocks and the late penalties.
Prepared by Prem Tax and Accounting Corp. Last checked against official sources on October 29, 2026.
FICA payroll taxes fund Social Security and Medicare, and every small business that pays wages collects them for the IRS. The law is the Federal Insurance Contributions Act (26 U.S.C. 3101 to 3128). Our Four-Jar Payroll Check keeps it simple.
- Employee and employer each pay 6.2% Social Security tax, capped at the wage base, plus 1.45% Medicare tax on all wages.
- Wage base: $184,500 for 2026; $192,300 announced for 2027.
- Employers withhold an extra 0.9% Additional Medicare Tax on wages over $200,000, with no employer match.
- Both shares are deposited electronically and Form 941 is filed each quarter. Late deposits cost 2% to 15%.
Who it covers
| Group | FICA applies? | Note |
|---|---|---|
| Employees of any employer | Usually | Includes working corporate officers |
| Sole proprietors and partners | No | Self-employment tax instead, from $400 of net earnings |
| S corporation owner working in the business | Yes, on wages | Distributions can be reclassified as wages |
The numbers
| Item | Amount or date | Year |
|---|---|---|
| Social Security wage base | $184,500 | 2026 |
| Self-employment tax up to wage base | 15.3% of 92.35% of net earnings | 2026 |
| Forms W-2 and W-3 | February 1, 2027 | 2026 wages |
| Late deposit penalty | 2% (1 to 5 days), 5% (6 to 15), 10% (16 or more), 15% (after IRS notice); one tier applies | 2026 |
Source: IRS Publication 15 and SSA
Our checklist
We call it the Four-Jar Payroll Check.
- Jar 1, Withhold: 6.2% and 1.45% from each employee, plus 0.9% above $200,000 in wages.
- Jar 2, Match: the employer's 6.2% and 1.45%; Social Security stops at the wage base.
- Jar 3, Deposit: electronically on the lookback schedule (monthly at $50,000 or less reported, otherwise semiweekly); next business day at $100,000.
- Jar 4, File: Form 941 quarterly; W-2 and W-3 due January 31 or on the next business day; records kept 4 years.
Mistakes people make
- Reporting deposits rather than tax owed, whether on line 16 of Form 941 or on Schedule B. That can bring an averaged failure-to-deposit penalty.
- Paying other bills first. When a responsible person willfully fails to pay over withheld taxes, that person can owe the trust fund recovery penalty personally.
- Believing the tips and overtime deductions remove FICA. They affect income tax only.
When to call an attorney: the IRS proposes to assess you personally with a trust fund recovery penalty, or IRS Criminal Investigation makes contact.
Common questions
What are the FICA rates for 2026?
Employee and employer each pay 6.2% on wages up to $184,500, plus 1.45% on all wages.
When is Form 941 due for the third quarter of 2026?
Monday, November 2, 2026, because October 31 is a Saturday. It is November 10 if every deposit was on time. More dates: [tax calendar](/tax-calendar/).
Does an employer match the 0.9% Additional Medicare Tax?
No. Withholding by the employer begins once the wages paid to an employee pass $200,000 for the year. The employee's final tax uses a filing-status threshold: $250,000 joint, $125,000 married filing separately, $200,000 others.
Official sources
- IRS: Publication 15, Employer's Tax Guide (2026)
- IRS: Publication 509, Tax Calendars (2026)
- SSA: Contribution and benefit base
- Federal Register: SSA notice of 2027 determinations (published October 26, 2026)
- IRS: Failure to deposit penalty
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