Arizona employers must follow federal FICA and Medicare rules when running payroll. These taxes fund Social Security and Medicare and are shared equally between employees and employers. For 2025, the Social Security rate is 6.2% up to $176,100, while Medicare is 1.45% with no cap. High earners also face an additional 0.9% Medicare tax, which employers must withhold.
This guide explains exactly how FICA and Medicare apply in Arizona, what rates to use, and the payroll compliance steps every employer needs to take.
Quick Answer
Arizona employers must follow federal FICA and Medicare tax rules, since the state does not add its own payroll taxes on top of them. For 2025:
- Social Security tax: 6.2% each from the employer and employee, up to the $176,100 wage base.
- Medicare tax: 1.45% from each side, with no wage cap.
- Additional Medicare tax: 0.9% withheld from employees earning more than $200,000 (single filers) or $250,000 (married). Employers withhold but do not match this portion.
Understanding FICA in Arizona
FICA stands for the Federal Insurance Contributions Act. It’s a federal payroll tax that funds:
- Social Security (retirement, disability, survivors’ benefits)
- Medicare (hospital and medical coverage)
Arizona employers are responsible for:
- Withholding the employee’s share of FICA taxes from every paycheck.
- Matching the same amount as the employer’s share.
- Remitting both parts to the IRS through payroll deposits.
👉 To see how these taxes affect take-home pay, explore the Arizona Paycheck Deductions Calculator.
2025 FICA & Medicare Rates at a Glance
| Tax Type | Employee Rate | Employer Rate | Wage Base Limit (2025) |
|---|---|---|---|
| Social Security | 6.2% | 6.2% | $176,100 |
| Medicare | 1.45% | 1.45% | No cap |
| Additional Medicare (EE only) | 0.9% | N/A | >$200,000 (single) / >$250,000 (married) |
Example: Calculating Employer and Employee Contributions
Scenario: An Arizona employee earns $5,000 biweekly.
- Social Security tax (6.2%): $310 withheld + $310 employer match.
- Medicare tax (1.45%): $72.50 withheld + $72.50 employer match.
- Total per paycheck:
- Employee pays $382.50.
- Employer pays $382.50.
If wages exceed $200,000 annually, the employer must also withhold the extra 0.9% Medicare tax from the employee’s paycheck above that threshold.
👉 For a full breakdown of payroll obligations, try the Arizona Payroll Tax Calculator.
Arizona Payroll Compliance Steps
To stay compliant, employers in Arizona should:
- Register with the IRS for a federal Employer Identification Number (EIN).
- Withhold and match FICA and Medicare taxes correctly for every payroll run.
- Deposit taxes electronically via the Electronic Federal Tax Payment System (EFTPS).
- File IRS Form 941 quarterly to report FICA and Medicare withholdings.
- Provide W-2 forms to employees and file them with the Social Security Administration.
- Coordinate state income tax withholding with the Arizona Department of Revenue, though Arizona adds no extra FICA-like taxes.
FAQs About FICA and Medicare in Arizona
Do Arizona employers pay different FICA rates than other states?
No, FICA and Medicare are federal taxes, so the rates are the same in every state.
What is the Social Security wage base for 2025?
$176,100. Wages above this amount are not subject to the 6.2% Social Security tax.
Is Medicare taxed on all wages?
Yes. The 1.45% applies to all wages, with no cap.
What is the Additional Medicare tax?
An extra 0.9% withheld from employee wages above $200,000 (single) or $250,000 (married). Employers do not match it.
Do self-employed people in Arizona pay FICA?
Yes. They pay 15.3% under SECA, covering both the employer and employee portions
Harry is the creator of ArizonaPaycheckCalculator.com, a trusted resource for accurate and easy-to-use payroll and tax calculators. With a focus on clarity and precision, Harry helps Arizona residents understand their take-home pay, deductions, and withholdings. Dedicated to making complex calculations simple, he combines financial knowledge with user-friendly tools to save users time and confusion.