Social Security Tax (FICA)
Understand Social Security tax (FICA) calculations and reporting requirements for employers and employees.
Overview
Social Security is a tax that is paid by both the employee and the employer. Social security will appear on payroll reports within Check under the name "FICA". FICA stands for Federal Insurance Contributions Act.
Employers must withhold social security taxes from employees' wages and contribute an equal amount. The amount calculated is 6.2% of taxable wages, up to a certain limit set by the IRS. This amount changes annually. Check will automatically update the annual amount without any requirement from our partners.
The taxable wage base for social security tax is $168,600 for the year 2024. This means that only the first $168,600 of an employee's wages will be subject to social security tax for the employee and employer.
Calculation
Example social security tax calculations.
Scenario | Calculation | Amount |
Sue earns $2,000 in Taxable Wages. What is the employer portion of FICA due? | $2,000 FICA Taxable Wages X 6.2% | $124.00 |
John earns $170,000 in Taxable Wages annually. What is John’s projected employer portion of FICA due? | The 2024 FICA Taxable Wage Base $168,600 X 6.2% | $10,453.20 |
Kelly’s gross pay is $2000. She has $150 taken out of her check for S125 Medical. What is the employer portion of FICA? | Taxable Wages: $200 - $150 = $1,850FICA Tax Due: $1850 x 6.2% | $114.70 |
FAQs
What if my customer says they have an employee exempt from social security tax?
If a customer has an employee with a valid reason for a social security tax exemption, please create a support ticket and Check can mark the employee exempt.
Does social security appear on the W-2?
Yes. Social security will be reported on the W-2 in box 3 (Social Security Wages) and box 4 (Social Security Tax withheld). Box 3 will only show the wages up to the annual wage base amount. Additionally, if the employee is a tipped employee, the social security wages may be split between boxes 3 and 7.
Recording
Last updated on May 31, 2024