| Federal Insurance Contributions Act These taxes are Social Security and Medicare Taxes which are deducted from each payroll. This was established in order to provide benefits and income to individuals that reach retirement age. Specifically, the Social Security pays the benefits and pay and the Medicare pays for hospitalization. In general, meals, lodging, clothing, and services are not subject to these taxes but certain expenses may be according to specific tax codes and regulations. The employer is responsible for deducting these taxes from an employee’s pay and direct payment along with a matching amount to the government. Social Security withholding is taken until the employee reaches a specified base limit. Medicare does not have a wage base limit and is deducted as long as the employee has wages. |