FICA and FUTA Tax Rates Explained

FICA and FUTA are the two federal payroll taxes that most often apply to household employees. Here's a breakdown of what each one is, who pays, and the current rates as of 2026.

FICA — Social Security and Medicare

FICA stands for the Federal Insurance Contributions Act. It funds two programs: Social Security (retirement and disability benefits) and Medicare (federal health insurance). Both the employer and the employee contribute an equal share.

Tax	Employee rate	Employer rate	Combined rate
Social Security	6.2%	6.2%	12.4%
Medicare	1.45%	1.45%	2.9%
Total FICA	7.65%	7.65%	15.3%

Rates current as of 2026. The Social Security wage base is adjusted annually by the SSA; FICA rates are set by federal law and are subject to change.

A few important nuances:

Social Security tax only applies on wages up to the annual Social Security wage base (adjusted each year by the SSA). Wages above the cap aren't subject to Social Security tax.
Medicare tax applies on all wages with no cap.
An additional 0.9% Medicare surtax applies to the employee (not the employer) on wages over $200,000 in a calendar year.

FUTA — Federal Unemployment Tax

FUTA is the Federal Unemployment Tax. It funds the federal portion of unemployment insurance. Unlike FICA, FUTA is paid entirely by the employer — the employee doesn't contribute.

Base rate: 6.0% on the first $7,000 of each employee's annual wages
Effective rate: typically 0.6% after the state unemployment tax credit, which most household employers qualify for depending on state and employer history
Maximum FUTA per employee per year: about $42 at the effective 0.6% rate
When it applies: FUTA is owed once you've paid $1,000 or more in household wages in any calendar quarter

When these taxes apply

FICA and FUTA apply by default to all household employee wages — unless your caregiver qualifies for a family caregiver exemption based on their relationship to you and (in some cases) their age. For the relationship-by-relationship breakdown, see How federal tax exemptions work for family caregivers.

Disclaimer: This information is provided for general educational purposes and should not be considered tax, legal, financial, or human resources advice.