FICA

FICA, the Federal Insurance Contributions Act, is the federal law behind the Social Security and Medicare taxes taken from paychecks. Employees pay 6.2% for Social Security and 1.45% for Medicare, 7.65% in all, and employers pay a matching amount.

The Social Security part stops at the yearly wage base. The Medicare part has no cap, and an Additional Medicare Tax of 0.9% starts above $200,000. Unlike federal income tax withholding, FICA does not depend on your W-4. See whether FICA is the same as Social Security.

Health insurance through a cafeteria plan and HSA contributions through payroll lower FICA wages. A 401(k) does not. The FICA tax guide has the details, and the FAQ explains how FICA differs from federal income tax. The employer half is part of employer payroll taxes.