Federal insurance contributions act (FICA)

The Federal Insurance Contributions Act (FICA) includes Social Security and Medicare taxes. These taxes help support retired workers and people with disabilities. Both employees and employers pay a portion of these taxes based on a percentage of taxable wages.

Gusto handles these tax payments if they are withheld from payroll.

2024 rates

Go the IRS website to learn more about the rates.

Social Security tax

• Total rate: 12.4%
  • 6.2% paid by the employer
  • 6.2% paid by the employee
• Wage base limit: $168,600
  • After this, no more Social Security tax is taken out for the year.
  • This limit typically changes each year.

Medicare tax

• Total rate: 2.9%
  • 1.45% paid by the employer
  • 1.45% paid by the employee

Additional Medicare tax

Employees making over $200,000 a year will have to pay an extra 0.9% in Medicare tax. Employers do not have to match this extra amount, but they do need to withhold it from the employee's pay.

The employee's W-4 elections only impact the Medicare tax they pay, not how much an employer pays.