The Federal Insurance Contributions Act (FICA) tax is a United States payroll (or employment) tax imposed by the federal government on both employees and employers to fund Social Security and Medicare —federal programs that provide benefits for retirees, the disabled, and children of deceased workers.
The 2015 FICA rate is 15.3% of which employees pay 7.65% while the employers pay 7.65%.
The 15.3% FICA tax is broken down as follows:
- Social Security FICA Tax (Employee pays 6.2%)
- Social Security FICA Tax (Employer pays 6.2%)
- Medicare (Employee pays 1.45%)
- Medicare (Employer pays 1.45%)
2015 FICA Tax Income Cap is $118,500. After this amount, individuals are not required to pay any additional FICA Tax but are still required to pay for the Medicare Tax (1.45%)
The 2016 FICA Tax Income Limit remains unchanged at $118,500.