What is fica tax?

[rajivkumar]

What is FICA tax and why is it taken out of every paycheck? I know it has something to do with Social Security and Medicare, but I’d like to understand how the tax works, who pays it, and whether the rate is the same for everyone. Can someone explain the basics?

 

[denjoshep]

The FICA tax (Federal Insurance Contributions Act) is a mandatory U.S. federal payroll tax that funds the Social Security and Medicare programs, which provide benefits for retirees, the disabled, and children.

 

[amara]

FICA is a U.S. federal payroll tax. It stands for the Federal Insurance Contributions Act and is deducted from each paycheck. Your nine-digit number helps Social Security accurately record your covered wages or self-employment.

 

[Lily]

FICA is a federal payroll tax in the United States. It is subtracted from every paycheck and is known as the Federal Insurance Contributions Act. Social Security uses your nine-digit number to precisely record your self-employment or insured wages.

 

[nikhilrajoria]

The Social Security and Medicare are funded by a FICA tax which is paid by both the employer and the employee, and it is a U.S. payroll tax.. The total rate is usually 15.3 percent divided between the two parties.

 

[Sophie]

FICA tax is the American payroll tax that supports social security and Medicare. It is subtracted on the wages of employees, and employers pay the same sum to fund these federally sponsored programs.