what is fica tax

Sun, 03 May 2026 03:57:03 +0000

The Federal Insurance Contribution Act refers to the taxes that largely fund Social Security benefits. FICA taxes also make up a sizeable chunk of Medicares budget. There is no senior citizen exemption to paying FICA taxes. As long as you work in a job that is covered by Social Security, payroll taxes will be collected. Under FICA, the Federal Insurance Contributions Act, 6.2 percent of your gross pay is withheld from your paycheck to fund Social Security, and your employer matches that contribution.. The COLA isn't the only thing changing for Social Security next year. Here are seven important ways Social Security will be different in 2025.