Federal payroll deductions include Social Security tax, Medicare tax and federal income tax withholdings, according to Bankrate. As of 2015, employers calculate Social Security tax, known as FICA, based on the employee’s gross earnings at a rate of 6.2 percent up to the first $118,500 of the employee’s pay.
Employers are required to withhold 1.54 percent of the employee’s gross earnings up to $200,000 to pay Medicare tax, notes Bankrate. The employer must withhold an additional 0.9 percent of earnings in excess of $200,000 for the Medicare tax.
Employers withhold federal income tax based on several factors, including the marital status and number of dependent of the individual employee, explains Bankrate. For example, for a single person earning from $39,750 to $93,050 with no allowances, the Internal Revenue Service requires employers to withhold $5,156.25 plus 25 percent of income earned in excess of $39,750.