What is FICA?
FICA (Federal Insurance Contributions Act) is a U.S. federal law that mandates payroll taxes to fund Social Security and Medicare programs. These taxes are levied on both employees and employers, with employees paying a portion of the tax and employers matching it. The FICA tax is withheld from an employee’s wages and is used to provide benefits for retirees, disabled individuals, and survivors of deceased workers, as well as funding Medicare healthcare services for individuals aged 65 and older.