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Federal Insurance Contributions Act - FICA


The taxes imposed under this law fund Social Security (FICA) and Medicare (OASDI). The employee pays 4.2% of the first $106,800 of taxable wages for 2011.  Theemployer is required to pay a 6.2% social security tax rate imposed on the employee's first $106,800 (2011) of taxable wages as well as the 1.45% Medicare tax rate imposed on all of the employee's taxable wages. No credits or withholding exemptions are permitted for the calculation of FICA taxes. When there is more than one employer, each must withhold FICA tax from the employee up to the taxable wage base.

 

Medicare
Employee 1.45% on all wages
Employer 1.45% on all wages
Self Employed 2.9% on net earnings

 

Social Security

Employee

4.2% on first $106,800 of wages (2011)

Employer

6.2% on first $106,800 of wages (2011)

Self employed

10.4% on first $106,800 of net earnings (2011)


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Helpful Hint... Anytime you move or have a major life change (for example - marriage, divorce, birth of a child, etc.) always be sure to complete a new W-4!