Federal Insurance Contributions Act (FICA)

The Federal Insurance Contributions Act (FICA) tax, also known as the Social Security tax, is paid equally by the employer and employee. This tax is composed of two elements:

1. OASDI — The old age, survivor and disability portion of the tax is paid on wages up to the maximum covered wage base for the year.

2. HI — The hospital insurance or Medicare portion of the tax is paid on all wages, without limit.