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FICA Withholding

Social Security and Medicare Taxes

The Federal Insurance Contributions Act (FICA) provides for a federal system of old-age, survivors, disability, and hospital insurance. The old-age, survivors, and disability insurance part is financed by the social security tax. The hospital insurance part is financed by the Medicare tax. Each of these taxes is reported separately.

Generally, you are required to withhold social security and Medicare taxes from your employees’ wages and you must also pay a matching amount of these taxes. Generally, employee wages are subject to social security and Medicare taxes regardless of the employee’s age or whether he or she is receiving social security benefits.

Tax rates and the social security wage base limit.
Social security and Medicare taxes have different rates and only the social security tax has a wage base limit. The wage base limit is the maximum wage that is subject to the tax for the year. Determine the amount of withholding for social security and Medicare taxes by multiplying each payment by the employee tax rate. There are no withholding allowances for social security and Medicare taxes. The employee tax rate for social security is 6.2% and 4.2% for 2011 (amount withheld). The employer tax rate for social security is also 6.2% (12.4% total, 10.4% for 2011). The employee tax rate for Medicare is 1.45% (amount withheld). The employer tax rate for Medicare tax is also 1.45% (2.9% total). There is no wage base limit for Medicare tax; all covered wages are subject to Medicare tax.

SuperPayroll Makes It Easy to Pay and File Your FICA Taxes

Your FICA withholding and income tax can be paid electronically through your SuperPayroll account. Reminders will be sent to you when they become due. You just click a key to pay them.

You can file Form 941 electronically with a click in your SuperPayroll account.

 

Learn more about our online payroll for small businesses.

Click here for more information about payroll taxes, federal payroll taxes, payroll deductions, payroll tax calculator, and state payroll taxes.

 

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