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Author:
Harold Averkamp, CPA, MBA

Social Security taxes definition

One component of the payroll tax referred to as FICA. (The other component of the FICA tax is the Medicare tax.) The Social Security tax is levied by the U.S. government on both the employee and the employer. In 2024 the Social Security portion of FICA (excluding Medicare) to be withheld from the first $168,600 of each employee’s annual salary or wages is 6.2%. In addition, the employer incurs Social Security expense of 6.2% and as a result must remit 12.4% of the first $168,600 of each employee’s salary or wages. (Medicare taxes are an additional 1.45% for both the employee and the employer on every dollar of salary and wages plus there is a Medicare surtax, which you can learn about on IRS.gov.) To learn more, see Explanation of Payroll Accounting.

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About the Author

Harold Averkamp

For the past 52 years, Harold Averkamp (CPA, MBA) has worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.

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  • Debits and Credits
  • Adjusting Entries
  • Financial Statements
  • Balance Sheet
  • Income Statement
  • Cash Flow Statement
  • Working Capital and Liquidity
  • Financial Ratios
  • Bank Reconciliation
  • Payroll Accounting
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