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Federal Insurance Contributions Act

Legislation in the United States that requires employees to contribute a certain percentage of their wages or salaries via payroll deductions to finance Medicare and Social Security. Employees are required to contribute 6.2% of each paycheck toward Social Security, up to a certain income limit. They are also required to pay 1.45% to pay for Medicare, with no income limit. Employers are required to make matching contributions for each employee. Under the Federal Insurance Contributions Act, employees do not actually receive this percentage of their wages or salaries. Proponents of the Act argue that that this allows employees to budget their taxes better while critics state that the tax is regressive. See also: FICA Tax.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

Federal Insurance Contributions Act (FICA).

The Federal Insurance Contribution Act (FICA) is the federal law that requires employers to withhold 6.2% from their employees' paychecks, up to an annual earnings cap.

Employers must match employee withholding and deposit the combined amount in designated government accounts.

These taxes provide a variety of benefits to qualifying workers and their families through the program known as Social Security. Retirement income is the largest benefit that FICA withholding supports, but the money also funds disability insurance and survivor benefits.

Under this act, an additional 1.45% is withheld, and matched by the employer, to pay for Medicare, which provides health insurance for qualifying disabled workers and people 65 and older. There's no earnings cap for this tax.

If you're self-employed, you pay FICA taxes as both employer and employee, or 15.3%.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.

FICA (Federal Insurance Contributions Act)

The law that provides for social security and Medicare benefits. This program is financed by payroll taxes imposed equally on the employer and the employee. See our Social Securty Wages and Earnings Base for the current wage base.
Copyright © 2008 H&R Block. All Rights Reserved. Reproduced with permission from H&R Block Glossary
References in periodicals archive ?
Kyle Coetzer (Scotland) Lisa Sthalekar (FICA Independent Board Member - Australia).
On a question, the executive director emphasised that FICA's role is to obtain advice from a security consultant and pass that on to the relevant quarters.
The discussions on this at the ICC have been going on and FICA will continue to urge ICC to prioritise this issue," he said.
The FICA and FUTA special timing rule applicable to nonqualified plans of deferred compensation paid to "top hat" employees in for profit companies: When nonqualified deferred compensation is provided to a "select group of management or highly compensated employees" (i.e., the "top hat group") of a for-profit business and vesting is scheduled to occur many years before the permissible payment event of actual or constructive receipt of the benefit, special attention must be given to the special timing rule of Sec.
Fica were able to hang on, though, to secure the draw they required to finish top of the league with a goal difference of +55 ahead of NUFC Kicks' +48.
The unanimous decision by the Supreme Court rejected Quality Stores' contention that the supplemental unemployment compensation was exempt from FICA, thereby reversing the Sixth Circuit.
SUB-Pay benefits are linked to the receipt of state UI benefits which, pursuant to the IRS's administrative position going back to the 1950s, is not subject to FICA or FUTA taxes.
However, angered at the move, the ICC said that FICA was being misleading and that they had breached trust.
The ICC responded strongly by expressing anger and disappointment through a media release on Thursday, stating that Fica is taking a confrontational stance.
FICA taxes are generally due on wages when they are actually or constructively paid to an employee.
The special FICA rules under Code section 3121(v)(2) also can present problems when above-market interest is earned in nonqualified defined contribution plans.
A prescricao de exercicios ganha cada vez mais importancia para os individuos portadores de doencas cronicas degenerativas, pois com o avanco das pesquisas em fisiologia do exercicio cada vez mais fica claro que a pratica regular de exercicio fisico e ou atividade fisica sao de vital importancia para que essas doencas demorem mais tempo para se instalarem no corpo humano seja de criancas, homens ou mulheres jovens ou idosos.