Medicare and social security are mandatory spending categories funded by taxes under the Federal Insurance Contributions Act (FICA) that are withheld from your paycheck .
The hospital insurance tax, often known as Medicare taxes, and the old-age, survivors, and disability insurance tax are the two types of taxes covered by the Federal Insurance Contributions Act (FICA). These taxes have various rates. FICA taxes total 15.3% between employee and employer contributions.
Employees contribute 6.2% of Social Security and 1.45% of Medicare from their gross income. Employers are required to match both, thus their share of the taxes is 7.65%. It should be noted that while Medicare does not have a wage-based contribution ceiling, Social Security does.
Therefore, medicare and social security are mandatory spending categories funded by taxes under the Federal Insurance Contributions Act (FICA) that are withheld from your paycheck .
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