Who Is Exempt From Social Security and Medicare Withholding? Employers in the U.S. are responsible for paying a portion of Social Security and Medicare taxes, commonly referred to as FICA taxes. While many assume that employers always contribute 7.65% of an employee’s wages, there are situations where this may not apply. While employers handle the functions of payroll tax withholding and allocation, workers and companies split the financial burden. The maximum wage base subject to Social Security tax for 2021 is $142,800. There is no wage base for Medicare — all covered wages are subject to Medicare tax. Make sure to familiarize yourself with your…