Description
The FICA tax is imposed to fund two different benefit programs: (1) the old-age, survivor and disability insurance program (“OASDI”), which funds the Social Security program that provides monthly retirement, disability, and survivor benefits; and (2) Medicare hospital insurance (“HI”). Generally, the OASDI tax rate of 12.4 percent applies to taxable wages and salaries up to the OASDI wage base ($106,800 for 2011 and $110,100 for 2012), and the HI tax of 2.9 percent applies to all taxable wages and salaries. Generally, one-half of both OASDI and HI taxes are paid by the employer and the other half are paid by the employee through mandatory withholding.
