FICA Tax
Quick Answer
Federal payroll taxes funding Social Security and Medicare programs.
Definition
Federal payroll taxes funding Social Security and Medicare programs.
Explanation
FICA (Federal Insurance Contributions Act) totals 7.65% of wages: 6.2% for Social Security (up to the annual wage base limit of $168,600 in 2024) and 1.45% for Medicare (no cap). Employers match these amounts. Self-employed individuals pay both portions (15.3% total) but deduct half.
An additional 0.9% Medicare surtax applies to high earners over $200,000 single.
Example
On $50,000 salary: $3,100 Social Security + $725 Medicare = $3,825 total FICA withheld from paychecks.
Frequently Asked Questions
What is FICA Tax?
Federal payroll taxes funding Social Security and Medicare programs.
How does FICA Tax work?
FICA (Federal Insurance Contributions Act) totals 7.65% of wages: 6.2% for Social Security (up to the annual wage base limit of $168,600 in 2024) and 1.45% for Medicare (no cap). Employers match these amounts. Self-employed individuals pay both portions (15.3% total) but deduct half.An additional 0.9% Medicare surtax applies to high earners over $200,000 single.
Can you give an example of FICA Tax?
On $50,000 salary: $3,100 Social Security + $725 Medicare = $3,825 total FICA withheld from paychecks.
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