What Is FICA Tax | Who Pays It and What Do I Need To Know?

Figuring out taxes on your own for the first time? One of the most important types of taxes to understand are FICA taxes (also called payroll taxes). This is different than income tax, which you also pay, but this also comes out of your paycheck.

This is a tax you pay on every dollar of earned income (up to $176,100 for part of the tax), so it is important to understand it. Your employer also pays FICA taxes on you for every dollar earned - so many employers count FICA as part of their total compensation for an employee.

Here’s what you need to know about FICA taxes, and how they will affect your bottom line.