Federal Taxes - Employee FICA Taxes Tab
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Access this tab using Maintain>Payroll>Federal Taxes. |
Use this tab to edit the employee's federal withholding tax information for Social Security. The system defaults to the current federal values for Maximum Annual Subject Wages and Percent of Wages.
Use the Calculation Method current if mid-year rate changes occur that are not retroactive. Alternatively, select year-to-date to perform an all-in-one catch up. When selected, this will adjust the employee’s next payroll check to ensure year-to-date withholding and expense accruals are accurate to the point in time when the check is calculated.
Social Security Tax: Change the Maximum Annual Subject Wages, Percent of Wages, and Calculation Method for the Employee's Social Security Tax. This will effect every employee's federal taxes. The system displays the current and past year's official federal withholding tax values.
- Override Official Values: Select this check box to enable the Maximum Annual Subject Wages and Percent of Wages fields, so that you can manually enter the wage information for these fields.
- Maximum Annual Subject Wages: Accept the default or enter the employee's maximum subject wages for the Social Security tax.
- Percent of Wages: Accept the default or enter the employee's percentage of maximum subject wages for the Social Security tax.
- Calculation Method: Accept the default of Y (Year-to-Date) or select a Calculation Method of C (Current). Select current if mid-year rate changes occur that are not retroactive. Alternatively, select year-to-date to perform an all-in-one catch up. When selected, this will adjust the next payroll check to ensure year-to-date withholding and expense accruals are accurate to the point in time when the check is calculated.
Medicare Tax: The system displays the Maximum Annual Subject Wages and Percent of Wages for the Employee's Medicare Tax. This effects every employee's federal taxes. The system displays the current and past year's official federal withholding tax values.
- Maximum Annual Subject Wages: The system displays the employee's maximum subject wages for the Medicare tax.
- Percent of Wages: The system displays the employee's percentage of maximum subject wages for the Medicare tax.
2025 Official Values: The values displayed in these fields are the official federal rates for the current year. Displayed are the Maximum Annual Subject Wages and Percent of Wages for both Social Security and Medicare taxes.
2024 Official Values: The values displayed in these fields are the official federal rates for the past year. Displayed are the Maximum Annual Subject Wages and Percent of Wages for both Social Security and Medicare taxes.
- Click Distribution Codes Information
to open the Maintain>Payroll>Distribution Codes form, where you can create or modify a distribution code. Each time this button is selected, a new Distribution Codes form is opened. - The FUTA rate is based on the existence of SUTA. When state tax information was set up (Maintain>Payroll>State Taxes), if the State Unemployment Tax check box (on the State tab) was not selected, or if the SUTA Percentage of Wages was 0% (on the Tax tab), the amount of FUTA calculated for the state will be 6.0%. Otherwise, FUTA will be calculated at .6%.
- The calculation of federal tax FIT and MC are provided by the system; the official values for FUTA, FICA, and SS are also provided but can be manually maintained if mid-year adjustments occur before a normal software update. The earning, benefit, and deduction amounts that are flagged as subject to the specified federal tax are used in the calculation of the tax.
- Additional Medicare Tax for high income wage earners: When an employee’s wages subject to Medicare exceed $200,000.00 for the calendar year an additional .09% of Medicare tax will be added to the Employee portion and withheld at 2.35%. For those employees who exceed the $200,000.00 threshold, this additional amount is reported separately on the 941 Worksheet report.