What is the FICA percentage for Social Security?

What is the FICA percentage for Social Security?

• A. 12.4%
• B. 10.2%
• C. 8.5%
• D. 14.5%

Answer: (A)

The Federal Insurance Contributions Act (FICA) imposes a payroll tax that funds Social Security and Medicare programs. Specifically for Social Security, the tax rate is set at 12.4%. This percentage is divided equally between the employer and the employee, meaning each pays 6.2%. This FICA contribution is crucial for providing benefits to retirees, disabled individuals, and survivors of deceased workers, making it a significant part of the U.S. social safety net. Understanding the FICA percentage is important for compliance with federal tax laws and for individuals to grasp how their payroll taxes contribute to Social Security. The other percentages do not reflect the accurate rate established for Social Security under FICA.

The Federal Insurance Contributions Act (FICA) imposes a payroll tax that funds Social Security and Medicare programs. Specifically for Social Security, the tax rate is set at 12.4%. This percentage is divided equally between the employer and the employee, meaning each pays 6.2%. This FICA contribution is crucial for providing benefits to retirees, disabled individuals, and survivors of deceased workers, making it a significant part of the U.S. social safety net.

Understanding the FICA percentage is important for compliance with federal tax laws and for individuals to grasp how their payroll taxes contribute to Social Security. The other percentages do not reflect the accurate rate established for Social Security under FICA.