Employer FICA Calculator

FICA stands for the Federal Insurance Contributions Act, which mandates payroll taxes to fund Social Security and Medicare. Employers are required to match the employee's contribution dollar for dollar, making the effective combined rate 15.3% on wages up to the Social Security wage base.

Social Security tax is levied at 6.2% on both the employer and employee, but only on wages up to the annual wage base limit of $168,600 (2024). Once an employee's year-to-date earnings exceed this cap, no additional Social Security tax is owed by either party for the remainder of the year. This creates a natural reduction in payroll tax costs for higher-paid employees later in the year.

Medicare tax has no wage base limit. Both the employer and employee pay 1.45% on all wages, regardless of amount. The Additional Medicare Tax of 0.9% applies only to employee wages exceeding $200,000 ($250,000 for married filing jointly), and this additional amount is the employee's responsibility only; the employer does not pay a matching portion.

For budgeting purposes, the maximum employer FICA cost per employee in 2024 is $10,453.20 for Social Security ($168,600 x 6.2%) plus 1.45% of total wages for Medicare. Understanding when each employee hits the SS wage cap helps with cash flow planning, as employer payroll tax costs decrease in the second half of the year for highly compensated employees.

Employers must deposit FICA taxes on a semi-weekly or monthly schedule depending on their total tax liability. Failure to deposit on time can result in penalties ranging from 2% to 15% of the unpaid amount.