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F
FICA Taxes

Social Security and Medicare taxes are often called FICA taxes because they are collected under the authority of the Federal Insurance Contributions Act. FICA taxes are also called employment taxes or payroll taxes.

When nonqualified stock options and stock appreciation rights are exercised and restricted stock and restricted stock units vest, FICA taxes are owed.

Social Security tax is normally withheld at a rate of 6.2% up to the annually adjusted Social Security Wage Base (an income ceiling). Medicare tax (1.45%) is uncapped. In 2013, the Medicare tax rate rose to 2.35% for single filers with yearly income of more than $200,000 and for married joint filers with yearly income of more than $250,000.

For the details of withholding taxes, see the Tax Center.

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