FICA Taxation

FICA stands for Federal Insurance Contributions Act, which is a law that requires employers and employees to contribute to the SocialSecurity and Medicare programs in the United States. The FICA tax is a payroll tax that is automatically deducted from employees' paychecks and paid by their employers to fund these programs.

The FICA tax is split into two parts: the SocialSecurity tax and the Medicare tax. As of 2021, the Social Security tax rate is6.2% for both employers and employees on wages up to $142,800, while theMedicare tax rate is 1.45% for both employers and employees on all wages.Employers are also required to pay an additional 0.9% Medicare tax on wages above a certain threshold for high-earning employees