What is the FICA Tax Rate?
Most employers will need to know what the FICA tax rate is. If you are an employer asking yourself, what is the FICA tax rate? The answer is 7.65% on gross earnings. The next question you may have as an employer is, how is that split between social security and Medicare?
Let’s start at the beginning with learning what FICA stands for. FICA stands for the Federal Insurance Contributions Act. The employer will pay his or her half and the other half is taken from the paycheck of the employee through payroll taxes.
FICA Provides for Federal System
FICA is basically the social security tax and it’s paid to the federal government to provide for old age, survivors, disability, and hospital insurance.
- The Social Security System Funds;
- Old Age Survivors Disability
- Medicare Funds;
- Hospital Insurance
What is the FICA Tax Rate for 2011, 2012?
- FICA Tax Rate = 7.65%
- Social Security Limit = $106,800
- Maximum Social Security Contribution = $6,621.60
As an employer you are required to withhold social security on your employees’ wages. Employers are also required to withhold Medicare taxes on wages and match the employee amount of 1.45% totally 2.9% of all wages earned. Medicare is not the same as social security when it comes to a contribution limit because one does not exist. Medicare does not have a contribution limit or cap.
So there you have the answer to your question, what is the FICA tax rate? Now what are you going to do about it? May I suggest Intuit Online Payroll? No need to calculate FICA tax rates by yourself when online payroll software is available.
Online Payroll Tax Software
How would you like to click a button to enter the hours an employee has worked for the week and automatically have all FICA taxes taken from the employees’ paycheck? Payroll software does exist and you can try the simple and easy QuickBooks Payroll services for FREE for 30 Days! No training is necessary and you can get started right after you create a user name and password.
If you are interested in discovering the benefits of having FICA taxes calculated for you, then give QuickBooks Payroll a try today. You have absolutely nothing to lose by trying before you buy. You will not have to ask what the FICA tax rates are for 2011, 2012 ever again!