Work & Paying Taxes

Understanding Your Pay: Lesson 4

The Federal Insurance Contributions Act (FICA)

  • FICA: this is an amount taken out of your pay. It is labeled as “FICA” on the “deductions” column of your paycheck stub.
  • FICA is commonly called the Social Security deduction.
  • This is an important tax that pays into the Social Security fund that pays an income for:
    • Your retirement
    • A person who can’t work because they are disabled
    • The spouse and children of taxpayers who have died
  • Your employer pays half of your FICA tax. You pay the other half with the amount taken out of you check.
  • If you don’t see a FICA deduction from your gross pay, find out why not!
    • There will be complicated trouble later if you should have been paying (through your employer) and you were not.
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