What is FICA?

Definition of FICA

FICA is the acronym for Federal Insurance Contributions Act. FICA refers to the combination of the U.S. Social Security payroll tax and the Medicare payroll tax.

For the calendar year 2018, the FICA payroll tax consists of:

  • The Social Security tax of 6.2% withheld from the first $128,400 of each employee's earnings (wages, salaries, etc.) in the year 2018 (January 1 through December 31, 2018).
  • The Medicare tax of 1.45% withheld from the total amount of an employee's 2018 earnings. (There is no earnings cap or limit on the Medicare tax.)

For the calendar year 2019, the FICA payroll tax consists of:

  • The Social Security tax of 6.2% withheld from the first $132,900 of each employee's earnings in the year 2019 (January 1 through December 31, 2019).
  • The Medicare tax of 1.45% withheld from the total amount of an employee's 2019 earnings. (There is no earnings cap or limit on the Medicare tax.)

FICA is Paid by Employees and Employer

In addition, the employer must match the FICA taxes withheld from its employees. This means that the employer will have an additional expense equal to the total of the FICA taxes withheld from its employees (except for the Medicare surtax). The employer has the responsibility to remit to the federal government both the employees' FICA withholdings plus the employer's matching amount.

A self-employed person must pay both the employee portion and the employer portion of the FICA tax.

Additional Information on FICA

The earnings wage limits and rates for other years as well as information on the Medicare surtax for higher income taxpayers can be found on IRS.gov.

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