1. What is FICA Tax?

FICA (Federal Insurance Contributions Act) tax is a U.S. payroll tax that funds Social Security and Medicare. For 2022-2023, the employee's share is 7.65% of wages (6.2% for Social Security and 1.45% for Medicare).

2. How Does the Calculator Work?

The calculator uses the FICA equation:

Where:

• \( Wages \) — Employee's gross wages in USD
• \( 0.0765 \) — FICA tax rate (6.2% + 1.45%)

Explanation: The calculation is straightforward - multiply gross wages by the combined FICA tax rate.

3. Importance of FICA Calculation

Details: Accurate FICA calculation ensures proper withholding for Social Security and Medicare benefits, and compliance with federal tax laws.

4. Using the Calculator

Tips: Enter gross wages in USD. The calculator will compute the employee's share of FICA taxes for 2022-2023.

5. Frequently Asked Questions (FAQ)

Q1: Is there a wage base limit for FICA?
A: Yes, Social Security tax (6.2%) applies only to wages up to $147,000 in 2022 and $160,200 in 2023. Medicare tax applies to all wages.

Q2: Are tips subject to FICA tax?
A: Yes, both cash and non-cash tips are subject to FICA taxes when reported.

Q3: Do employers match FICA contributions?
A: Yes, employers pay an equal amount (7.65%) for each employee.

Q4: Are there additional Medicare taxes?
A: High earners (over $200,000 single/$250,000 married) pay an additional 0.9% Medicare tax.

Q5: Are self-employed people subject to FICA?
A: Self-employed individuals pay SECA tax which is similar but at a higher rate (15.3%).