The Federal Insurance Contributions Act — payroll taxes that fund Social Security and Medicare.
FICA (Federal Insurance Contributions Act) refers to the US payroll tax that funds Social Security (Old-Age, Survivors, and Disability Insurance) and Medicare. The combined FICA tax rate is 15.3% — split equally between employer and employee. The employee share is 7.65% (6.2% Social Security up to the annual wage base limit, currently $168,600 in 2026, plus 1.45% Medicare on all wages, plus an additional 0.9% Medicare surtax on wages above $200,000 for single filers).
Employers withhold the employee portion from each paycheck and contribute their matching share, then deposit the combined amount to the IRS along with federal income tax withholding via Form 941 (quarterly) or Form 944 (annually for small employers). FICA is reported on each employee's annual W-2 in boxes 3, 4, 5, and 6.
Self-employed individuals pay both halves of FICA as self-employment tax (15.3%) on their net earnings via Schedule SE on their personal tax return. Failure to deposit FICA on time triggers steep IRS penalties, escalating from 2% (1-5 days late) to 15% (over 16 days late). Modern payroll software automates FICA withholding and deposit timing.
Each pay cycle our system withholds 7.65% FICA from employee wages and matches it on the employer side.
Peoplifi unifies HR, payroll, time tracking, and performance into one modern platform — so concepts like FICA stay handled, not stuck in spreadsheets.
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