FICA taxes fund two major US social insurance programs: Social Security and Medicare. Both employers and employees contribute, making it one of the most significant payroll taxes in the American employment system.
Current Tax Rates
The total FICA tax rate is 15.3% of wages. This breaks down into 12.4% for Social Security (split evenly between employer and employee at 6.2% each) and 2.9% for Medicare (split at 1.45% each). The Social Security portion only applies up to an annual wage base limit, which adjusts yearly for inflation.
Additional Medicare Tax
High earners face an additional 0.9% Medicare tax on wages exceeding $200,000 for single filers or $250,000 for married couples filing jointly. This additional tax is paid only by the employee, not matched by the employer.
EOR and FICA
When working with an Employer of Record, the EOR handles all FICA calculations, withholding, and remittance to the IRS. They manage the employer portion of FICA as part of their service, ensuring timely deposits and accurate reporting on quarterly and annual tax forms.