FICA Taxes
Accounting glossary · Understand, connect, apply
FICA taxes are US payroll taxes funding Social Security and Medicare. They generally involve employee withholding and employer obligations, subject to applicable rules and exceptions.
Example
An employer withholds the relevant employee amounts from gross wages and records its own payroll-tax cost separately.
Remember the difference
FICA is not federal income tax or FUTA. Current rates, limits and additional Medicare rules must be checked for the relevant year.
Examples are simplified for learning. Where a term depends on US law, IFRS, US GAAP or a historical rule, check the context explained above and the requirements relevant to your course.
Study references: OpenStax financial accounting and managerial accounting. For reporting requirements, consult the applicable IFRS Standards or FASB guidance. US tax terms should be checked against the relevant tax-year IRS instructions.
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