What is the Federal Insurance Contributions Act?
The Federal Insurance Contributions Act (FICA) is a law authorized in 1935 that decrees a payroll tax on the paystubs of an employee, with identical contributions from the employers. The amount collected is used for Medicare tax and Social Security tax programs.
Federal Insurance Contributions Act Tax
FICA is a law passed in the U.S. compelling all employees to pay a certain percentage of their earnings towards the country’s Social Security and Medicare program. Commonly referred to as FICA tax, it combines two separate taxes.
What is the Employee State Insurance Act?
Employee State Insurance Act is a social security scheme that protects employees against disability towards an employee, which can be injury or sickness. Employees should subscribe to the scheme to get Medicare and other benefits.
Also, See: Federal Unemployment Tax Act (FUTA)