The Relationship between FICA and Form 941
All business owners who hire staff are responsible for a variety of payroll tasks. One of them is paying FICA taxes on behalf of their employees. The Federal Insurance Contributions Act, or FICA, is a significant levy that pays critical social security programmes such as Social Security and Medicare. These programmes ensure that the elderly have a source of income and access to healthcare throughout retirement. As a result, all employees and employers contribute to the funding of these initiatives. Employer FICA tax contributions are organised on a quarterly basis using Form 941. Keep in mind that FICA taxes are normally due semi-weekly or monthly, and this form merely serves as a tracking mechanism for employers. FICA: The Basics As previously stated, FICA funds Social Security and Medicare. FICA is taxed at a rate of 15.3 percent, with 12.4 percent going to Social Security and the remaining 2.9 percent going to Medicare. Employers contribute 7.65 percent of this 15.3 perce...