How is FICA Calculated?

The current tax rate that is applicable for employers is 6.2% for Social Security. The present day Medicare tax rate is 1.45% for employers. The employer FICA tax burden is 7.65%. Likewise, your employees also contribute 7.65%. The total FICA contribution should equal 15.3%. Employers factor in multiple components when they calculate the taxes that they owe under the Federal Insurance Contributions Act (FICA).

You may wonder how to calculate FICA for independent contractors. Self-employed workers pay the full FICA tax without employer contributions. These classified workers pay a 12.4% Social Security tax and 2.9% Medicare tax. Factor in the tax when you submit estimated taxes for each quarter.

All business owners must collect, report, and remit FICA taxes to the Internal Revenue Service. The good news is that FICA taxes seldom change and do not change significantly when they do. The main adjustments relate to inflation. Set reminders and invest in a full accounting suite of tools. Generate and electronically file Form 941 with our AMS Payroll software. Schedule a free demo or call us today at (405) 340-0697 with any questions.

Software Solutions from AMS

Our W-2 and 1099 Forms Filer is our only required platform. From there, users pick the services they need. Choose from the tools below to build out your customized accounting software.