How to Calculate FICA/Medicare Withheld

Your employer is responsible for withholding FICA taxes from your paycheck.

FICA stands for Federal Insurance Contributions Act, which is the law that imposed payroll taxes for the first time. Payroll taxes include both Social Security and Medicare taxes and are imposed on only earned income, such as wages and bonus payments. If you work as an employee, your employer will automatically withhold FICA taxes from your paycheck.

Things You'll Need

• Calculator

Instructions

1. Consult the Social Security Administration Web site to find the current Medicare and Social Security tax rates. As of 2010, the tax rate for employees equals 6.2 percent for Social Security taxes and 1.45 percent for Medicare taxes.

2. Multiply your pre-tax paycheck amount by the Medicare tax rate. For 2010, if your paycheck amount was $1,800, you would multiply $1,800 by 0.0145 to find that your Medicare taxes withheld would be $26.10.

3. Multiply your pre-tax paycheck amount by the Social Security tax rate. Continuing the example, for 2010, you would multiply $1,800 by 0.062 to find that your Social Security taxes withheld would be $111.60.

4. Add your Medicare taxes withheld to your Social Security taxes withheld to calculate your total FICA taxes withheld. Finishing this example, you would add $111.60 to $26.10 to find that your total FICA taxes withheld would be $137.70.

Tips & Warnings

• Do not reduce your income by the amount of your pre-tax contributions to retirement plans such as 401(k) plans or 403(b) plans. These contributions only affect your income tax, not your FICA taxes.

References

• Social Security Administration: Update 2010
• Money-Zine: FICA Tax