Payroll taxes fund Social Security and Medicare and are paid by both employees and employers. Our payroll tax calculator computes your FICA withholdings, federal income tax withholding, and take-home pay—essential for employers processing payroll and employees verifying pay stub accuracy.
FICA (Federal Insurance Contributions Act) taxes fund Social Security and Medicare. Employees pay 6.2% for Social Security (on wages up to $168,600 in 2024) and 1.45% for Medicare on all wages. Employers match these amounts. Self-employed individuals pay both halves (15.3% total).
Social Security tax (6.2%) applies only to wages up to the annual wage base—$168,600 in 2024. Once you earn above this threshold, no additional Social Security tax is withheld for the year. Medicare tax (1.45%) has no wage ceiling.
An extra 0.9% Medicare tax applies to wages above $200,000 for single filers ($250,000 married filing jointly). Employers withhold this once wages exceed $200,000 in a calendar year, but the correct amount (based on household income) is reconciled on Form 1040.
Self-employed individuals pay 15.3% on net self-employment income up to the wage base: 12.4% Social Security + 2.9% Medicare. However, you deduct 50% of SE tax as an above-the-line deduction on Form 1040. Net SE income is multiplied by 92.35% before applying the SE tax rate.
The IRS deposit schedule depends on your lookback period liability. Monthly depositors pay by the 15th of the following month. Semi-weekly depositors (larger payrolls) must deposit Wednesday or Friday payroll taxes on the following Wednesday or Friday respectively. Form 941 is filed quarterly.
Backup withholding (24% flat rate) applies to certain payments like independent contractor fees when the recipient fails to provide a correct TIN or the IRS instructs the payer to withhold. It ensures the IRS collects taxes on income that would otherwise go unreported.