How is the contribution rate for FICA typically structured?

The contribution rate for FICA (Federal Insurance Contributions Act) is structured as a fixed percentage of wages. This means that both employees and employers contribute a specific percentage of each employee's earnings, without regard to the employee's job title, the company size, or any other variable factors. As of 2023, the combined employee and employer contribution rates for Social Security and Medicare taxes are set by law, ensuring uniformity across all employers.

This fixed rate simplifies payroll calculations, making it easier to determine the amount that needs to be withheld from wages and matched by the employer. The consistent approach helps in maintaining equity in tax contributions among workers, regardless of their individual circumstances or employment statuses.