Federal Insurance Contributions Act

The Federal Insurance Contributions Act (FICA) is a U.S. law that mandates payroll taxes to fund Social Security and Medicare. Employees and employers each contribute a specific percentage of wages to ensure financial support for retirees, people with disabilities, and healthcare for the elderly. FICA contributions are deducted from employee paychecks and matched by employers. This system is crucial for providing a safety net for millions of Americans, helping to secure income in retirement and access to medical services. FICA reflects a collective commitment to social welfare and public health initiatives.