FICA Tax
BenefitsAll
FICA Tax
FICA stands for Federal Insurance Contribution Act. FICA imposes an employment tax that is paid equally by the employee and the employer. All employers are required by federal law to withhold FICA taxes from employee earnings and forward the monies to the govt. FICA taxes fund Social Security and Medicare benefits. The amount of the tax is a percentage of compensation.
In 2013, the federal government added two new Medicare taxes that are paid by the individual tax filer (Medicare Additional Tax and Net Investment Income Tax). Use our calculator at the bottom of the page to calculate your Medicare tax bill.
- FICA Tax on Earnings
- 2013 FICA Tax Rates
- Medicare Additional Tax
- Net Investment Income Tax
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Compensation subject to FICA taxes includes but is not limited:
- Wages (salaried and hourly)
- Overtime
- Bonus
- Commission
- Paid Time Off (Vacation, Sick Leave, Bereavement)
FICA TAX
Employee Pays
Employer Pays
Social Security
6.2%
6.2%
Medicare
1.45%
1.45%
NOTES: (1) Self-employed individuals pay both the “employee” and “employer” share of Social Security and Medicare taxes; (2) There is a wage limit for Social Security taxes (wages above a pre-stated amount are not subject to the tax); (3) there is no wage limit for the Medicare tax (all wages earned are subject to the 2.9% Medicare tax)
Medicare Additional Tax
Employee
Employer
Self-employed
.9%
0%
.9%
Applies to wages above the below amounts
Married Filing
Single
Single
Married Filing
Jointly
Jointly
Single
$125,000
$250,000
$200,000
Net Investment Income Tax (NIIT)
The Net Investment Income Tax (NIIT) is a new Medicare tax on investment income. The tax is effective for the 2013 tax year.
*If you anticipate owing the NIIT tax, you can include an additional dollar amount to be withheld from your wages on the Form W-4 (line 6).
Example: 2013 NIIT for Sue Parks: Sue is single with a MAGI of $250,000 for the calendar year 2013. Sue had $40,000 in investment income in 2013. Sue must pay a 3.8% NIIT tax on the lesser of $50,000 ($250,000 in MAGI - $200,000 threshold for single filers) OR $40,000 (investment income amount) = (3.8% x $40,000) or $1,520.
Medicare Tax Calculator
Know What You May Owe in 3 Easy Steps!
This tool is not intended to provide tax or legal advice. You should consult with a tax or legal professional for specific advice on all tax and legal matters.