FICA Taxes The Social Security withholding is 12.4%, paid as 6.2% withheld from the employee, and 6.2% paid by the employer. Medicare is 2.9%, with 1.45% paid by both the employee and employer.7 FUTA Taxes Employers pay FUTA taxes based on the number of employees they have and unem...
SEP IRA contributions are not subject to FICA (Social Security and Medicare) or federal unemployment (FUTA) taxes. 401(k) plans, for example, do not have the same advantage. You’ll pay both FICA and FUTA tax on your entire income, including your 401(k) plan contributions. IMPORTANT: The...
Dive into this small business owner guide to understand the difference between payroll tax vs. income tax and how to manage them.