FICA tax is a combination of a Social Security tax and a Medicare tax. The Social Security tax is assessed on wages up to $147,000; the Medicare tax is assessed on all wages.
Self-employed individuals pay a self-employment tax which is the equivalent of FICA tax. For 2022, they will pay a 15.3% OASDI tax (the old age, survivors, and disability insurance tax) on the first $137,700 of self-employment income. A 2.9%* Medicare tax is imposed on all net self-employment income.
The earnings limit for retirees under full retirement age is $19,560. Social Security benefits will be reduced $1 for every $2 of earnings above this limit. There is no earnings limit for individuals at full retirement age. (Special rules apply in the first year of retirement.)
