FICA and AFRH Deductions

Start Here If You Are New to FICA and AFRH

Two universal deductions appear on every Active Duty Marine's LES. FICA combines Social Security (OASDI) at 6.2 percent of basic pay up to the annual wage base PLUS Medicare at 1.45 percent of basic pay with no cap (plus a 0.9 percent Additional Medicare Tax for high earners). AFRH deduction is a small monthly amount (up to $1.00) for enlisted Marines, warrant officers, and limited duty officers that funds the Armed Forces Retirement Homes. RC Marines and most commissioned officers are NOT subject to AFRH.

This page walks you through FICA and AFRH from your seat as a General Marine. By the end you will know.

• The FICA components (OASDI Social Security and Medicare)
• The OASDI wage base (annual cap on Social Security tax)
• The Medicare 1.45 percent with no cap
• The Additional Medicare Tax 0.9 percent for high earners
• Who is subject to AFRH ($1.00 per month for enlisted, warrant, LDO)
• Who is exempt from AFRH (commissioned officers above LDO, RC members)

Every fact on this page comes from DoD 7000.14-R Volume 7ADoD 7000.14-R Volume 7A Chapters 45 and 46, Title 24 U.S.C. section 411Title 24 U.S.C. section 411, and Title 26 U.S.C.Title 26 U.S.C. Chapter 21.

What FICA Is

Per Chapter 45 paragraph 1.1, FICA (Federal Insurance Contributions Act) requires Federal Agencies to withhold Social Security and Medicare taxes from the basic pay of Marines covered by the Social Security Act, and to pay matching FICA taxes to the Social Security Administration.

FICA has two components.

• OASDI (Old Age, Survivors, and Disability Insurance) tax. Also called Social Security tax.
• Hospital Insurance tax. Also called Medicare tax.

OASDI (Social Security) Tax

Per Chapter 45 paragraph 1.1, the OASDI tax rate applies only to basic pay payments that do not exceed the annually variable OASDI wage base.

Tax Rate

The OASDI tax rate is 6.2 percent of basic pay (employee share). The federal government also pays a matching 6.2 percent (employer share) directly to the Social Security Administration.

Annual Wage Base

The OASDI wage base is set annually by the Social Security Administration. The 2025 wage base is $176,100. Verify the current year wage base at https://www.ssa.gov/.

Once a Marine's year-to-date basic pay exceeds the OASDI wage base, OASDI withholding stops for the remainder of the calendar year. OASDI resumes on January 1 of the following year.

Marines Subject to OASDI

Per Chapter 45 paragraph 2.1, all Marines on basic pay are subject to FICA tax. This includes.

• Regular Marines on Active Duty.
• Marine Service Academy cadets (excluding foreign nationals).
• Reserve Marines on Active Duty or AT.
• Reserve Marines on IDT (drill weekend pay).

Medicare (Hospital Insurance) Tax

Per Chapter 45 paragraph 1.1, there is no cap on wages subject to Medicare tax withholding.

Tax Rate

The Medicare tax rate is 1.45 percent of basic pay (employee share). The federal government pays a matching 1.45 percent (employer share).

Additional Medicare Tax (0.9 Percent)

For high-income Marines, an Additional Medicare Tax of 0.9 percent applies to basic pay above an income threshold. The threshold depends on filing status.

• Single. $200,000.
• Married filing jointly. $250,000.
• Married filing separately. $125,000.

The Additional Medicare Tax is employee-only (no employer match). It is reconciled on the Marine's annual federal income tax return.

Marines Subject to Medicare

All Marines on basic pay are subject to Medicare tax with no wage base cap.

What Pay Is Subject to FICA

Per Chapter 45 paragraph 2.2, ONLY the following wages are subject to FICA withholding.

• Basic pay (excluding the reduction for educational benefits under the Montgomery G.I. Bill).
• Inactive duty compensation (RC drill pay).
• Taxable amounts earned but unpaid at the date of death (subject to the maximum earnings tax) if paid to the beneficiary during the same calendar year.
• Basic pay or compensation earned when absence is the result of injury, sickness, or hospitalization.
• Taxable amounts received prior to the Government's voidance of the Marine's enlistment contract.
• Waived portions of forfeitures of basic pay payable to dependents of a confined Marine per Chapter 48.

What Pay is NOT Subject to FICA

The Chapter 45 paragraph 2.2 list is exhaustive. Pay items NOT in that list are NOT subject to FICA withholding. Common Marine pay items NOT subject to FICA include.

• BAH (non-taxable allowance).
• BAS (non-taxable allowance).
• OCONUS COLA (non-taxable).
• HFP/IDP (non-taxable when in CZ).
• FSA (non-taxable when in CZ).
• Special Duty Assignment Pay (SDAP) per MCO 7220.12RMCO 7220.12R paragraph 5.i.
• Hazardous Duty Incentive Pay (HDIP).
• Foreign Language Proficiency Bonus (FLPB).
• Aviation Incentive Pay (AvIP).
• Career Sea Pay (CSP).
• Hardship Duty Pay (HDP).
• Reenlistment bonuses (SRB) and other bonuses (separate Federal supplemental wage withholding rules apply).
• Other special and incentive pays.

The exhaustive Chapter 45 paragraph 2.2 list means the LES typically shows FICA only on the basic pay amount. Special pays appear with federal income tax withheld but no FICA deduction.

Where FICA Tax Goes

The Social Security Administration uses FICA contributions to fund.

• Social Security retirement benefits (OASDI).
• Social Security disability benefits (OASDI).
• Social Security survivor benefits (OASDI).
• Medicare hospital insurance (Hospital Insurance).

A Marine accumulates Social Security credits over the career based on FICA contributions. After 40 quarters of FICA contributions (10 years), the Marine is fully insured for Social Security retirement benefits at age 62 or later.

What AFRH Is

Per Chapter 46 paragraph 1.1, the Armed Forces Retirement Home (AFRH) is an independent establishment in the executive branch. The purpose is to provide residences and related services for retired and former members of the Armed Forces who meet the eligibility requirements of the AFRH.

The AFRH includes two facilities.

• AFRH Washington (formerly Soldiers' and Airmen's Home).
• AFRH Gulfport (formerly Naval Home).

AFRH Deduction Amount

Per Chapter 46 paragraph 2.0, the Secretary of Defense sets the monthly deduction from pay in an amount not to exceed $1.00. The current AFRH deduction is $0.50 per month for most categories.

The deductions are NOT prorated for partial months of service. The full monthly deduction applies for any month the Marine is on the Active Duty list.

The deductions are deposited in the AFRH Trust Fund.

Marines Subject to AFRH Deductions

Per Chapter 46 paragraph 3.1, the following Marines are subject to AFRH deductions.

• Regular enlisted members.
• Warrant officers.
• Limited duty officers.

Marines NOT Subject to AFRH Deductions

Per Chapter 46 paragraph 3.2, the following are NOT subject to deductions.

• Reserve Component members.
• Commissioned officers above the limited duty officer designation.
• Cadets and midshipmen.
• Service Academy cadets.

This means the typical AFRH deduction applies to AC enlisted Marines, AC warrant officers, and AC limited duty officers (LDOs). Marine commissioned officers above LDO grade are exempt.

AFRH Eligibility for Residency

To be eligible to reside at the AFRH after retirement, a former Marine must.

• Have at least 20 years of military service or be retired due to service-connected disability.
• Be 60 years old or older (with some exceptions).
• Have an honorable discharge.
• Meet the AFRH financial and medical eligibility criteria.

The AFRH is operated as a not-for-profit residence with on-site medical care, dining, and recreational programs.

Verifying FICA and AFRH on the LES

A monthly LES check confirms FICA and AFRH deductions are correct.

Step 1. Pull Your LES

Through MyPay each payday.

Step 2. Verify the FICA Lines

The LES shows FICA deductions under the Deductions section. Common abbreviations.

• FICA-SOC SEC or OASDI. Social Security tax (6.2 percent of basic pay up to wage base).
• FICA-MEDICARE or MEDICARE. Medicare tax (1.45 percent of basic pay).
• ADD MEDICARE TAX. Additional Medicare Tax (0.9 percent above threshold).

Step 3. Verify the OASDI Year-to-Date Cap

The OASDI YTD total should approach the annual cap as the year progresses (6.2 percent of the wage base = approximately $10,918 for 2025 at the $176,100 wage base). Once YTD reaches the cap, OASDI withholding stops for the year.

Step 4. Verify the AFRH Line (If Applicable)

For AC enlisted, warrant, and LDO Marines, the LES shows AFRH as a line item. Common abbreviation. AFRH at $0.50 per month.

Step 5. Resolve Discrepancies

Coordinate with your S-1. The reporting unit (I&I S-1 with direct UD/MIPS access, or a battalion S-1 routing through their PAC) routes through DFAS Marine Corps Pay.

Common Questions Marines Ask

Why is my Social Security tax being withheld but I am decades from retirement?

Per Chapter 45 paragraph 1.1, FICA contributions are mandatory under federal law. The contributions accumulate Social Security credits over your career. After 40 quarters (10 years) of FICA contributions, you become fully insured for Social Security retirement benefits at age 62 or later. Military service counts toward the 40-quarter threshold.

I am an O-3 making $90,000 in basic pay. Will my OASDI ever stop?

The 2025 OASDI wage base is $176,100. At your basic pay rate, you stay below the cap and OASDI continues throughout the year. If your total annual basic pay exceeds the cap (e.g., O-7 and above with high YOS), OASDI stops for the remainder of the calendar year and resumes January 1.

Why don't I have FICA on my BAH?

Per Chapter 45 paragraph 2.2, FICA applies only to basic pay (and certain other taxable wages). BAH and BAS are non-taxable allowances and are NOT subject to FICA. This protects your housing and food allowance from being taxed.

I am a Captain. Why don't I have AFRH on my LES?

Per Chapter 46 paragraph 3.2, commissioned officers above the limited duty officer designation are NOT subject to AFRH deductions. The AFRH is funded by enlisted, warrant, and LDO contributions only.

I am an enlisted Marine and want to retire to the AFRH. How do I qualify?

Coordinate with the AFRH at https://www.afrh.gov/. The eligibility criteria include 20 years of military service (or service-connected disability retirement), age 60 or older, honorable discharge, and AFRH financial and medical eligibility.

How does FICA Additional Medicare Tax work?

The Additional Medicare Tax is 0.9 percent of wages exceeding the income threshold ($200,000 single, $250,000 married filing jointly). The DoD withholds the additional tax once your YTD wages exceed the threshold. The exact amount is reconciled on your annual federal income tax return.

Where to Go for Help

Routing by Issue

• FICA tax verification. The Social Security Administration FICA tax tables at https://www.ssa.gov/.
• Social Security benefit estimates. https://www.ssa.gov/myaccount/.
• AFRH eligibility for residency. The AFRH at https://www.afrh.gov/.
• LES corrections for FICA or AFRH deductions. Your S-1 routes through DFAS Marine Corps Pay.
• DFAS Marine Corps Pay direct contact. Phone 1-888-332-7411 (DSN 312-571-9450 from overseas).

Where to Go Next on This Site

• Pay and Entitlements landing page lists all the pay topics.
• Federal Tax Withholding covers FITW and SITW.
• Basic Pay covers the pay tables that drive the FICA calculation.

Related Roles

• Leaders ensure Marines understand FICA contributions accumulate Social Security credits over the career.
• Admin at S-1 supports LES questions and routes corrections through DFAS Marine Corps Pay.
• Commanders endorse Marines understanding the AFRH residency benefit at retirement.

FICA and AFRH are universal LES deductions for AC Marines. Social Security at 6.2 percent up to the wage base, Medicare at 1.45 percent with no cap, and AFRH at $0.50 per month for enlisted, warrant, and LDO. The Additional Medicare Tax of 0.9 percent kicks in for high earners. Track your Social Security earnings record at https://www.ssa.gov/myaccount/.