Federal Insurance Contributions Act Tax (FICA Tax)
Definition - What does Federal Insurance Contributions Act Tax (FICA Tax) mean?
Federal Insurance Contributions Act Tax also known as (FICA) is a federal employment or payroll tax that is applicable on both employers and employees to fund Medicare and Social Security. These include programs and benefits like hospital insurance for the elderly, benefits for retirees, benefits for the disabled, and benefits for children of deceased employee.
Justipedia explains Federal Insurance Contributions Act Tax (FICA Tax)
The amount that an individual pays in the form of taxes is usually indirectly related to what type of social security benefits they will be receiving as a retiree. Some people claim that payroll tax doesn’t fall into a tax category as it is tied with the benefits that the payer will be receiving later in life.