How Do You Calculate FICA Taxes on a Paycheck?


Quick Answer

Federal Insurance Contributions Act taxes, which employers, employees and self-employed individuals pay to fund Social Security and Medicare, are calculated at the rate of 12.4 percent of salary for Social Security and 2.9 percent for Medicare as of 2015, reports the IRS. High income earners pay an additional Medicare tax.

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Full Answer

Salaried employees and employers split the cost of FICA tax, according to CNN Money. Although the self-employed are liable for the entire amount of FICA taxes, they can deduct half of the total as a business expense. Employers and employees each pay 6.2 percent of Social Security taxes and 1.45 percent of Medicare taxes as of 2015, states the IRS. The wage base limit, or maximum taxable wage, for Social Security tax is $118,500 in 2015, but there is no wage base limit for Medicare.

Since the Affordable Care Act of 2013, those with higher incomes pay an additional 0.9 percent in Medicare taxes, reports CNN Money. Employers are required to withhold this extra tax from salaries, but only employees pay the tax, according to the IRS. The qualifying threshold for the extra Medicare tax for singles, heads of household and widows or widowers with a dependent child is $200,000 as of 2015. The threshold for married couples filing jointly is $250,000, and if married couples file separately it is $125,000. All wages and income, including noncash items such as fringe benefits, are subject to the tax.

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