United States Social Security and Medicare Taxes.
The Federal Insurance Contributions Act (FICA) covers the tax rates for Social Security and Medicare Taxes.
Social Security taxes provide cover for the old-age, survivors, and disability insurance.
Medicare Taxes cover the hospital insurance tax.
The FICA tax rate, which is the combined Social Security rate of 6.2 percent and the Medicare rate of 1.45 percent, remains at 7.65 percent for 2022, for those who earn under $200,000 in a calendar year.
Those who earn over $200,000 in a calendar year, pay an additional Medicare tax of 0.9%, on earnings above that threshold.
The combined rate is: 7.65% on earnings up to $200,000, plus 8.55% on earnings over $200,000.
Examples:
- Earn $100,000 and you pay $7,650. (100,000 x 7.65%)
- Earn $200,000 and you pay $15,300. (200,000 x 7.65%)
- Earn $300,000 and you pay $16,200. [(200,000 x 7.65%=15,300)+(100,000 x 0.9%=900)]
The Medicare tax rate applies to all taxable wages and remains at 1.45 percent with the exception of an “additional Medicare tax” assessed against all taxable wages paid in excess of the applicable threshold.
There is additional Medicare tax at a 0.9 percent rate on wages and other compensation paid to an employee in excess of $200,000 in a calendar year.
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