What is FICA Tax?
FICA Tax is a U.S. payroll tax that funds Social Security and Medicare programs. It comprises two parts: the Social Security tax, which is used to provide benefits for retirees, disabled individuals, and survivors of deceased workers, and the Medicare tax, which supports healthcare services for individuals aged 65 and older. The tax is split between employees and employers, with each party contributing an equal share of the total tax rate. FICA tax is deducted from employees’ wages and is mandatory for most workers in the U.S.