What is deducted from an employee's paycheck for Social Security contributions?

Study for the AIPB Mastering Payroll Exam. Review flashcards and questions with explanations. Prepare effectively and boost your confidence!

The deduction from an employee's paycheck for Social Security contributions is specifically referenced as the FICA tax. FICA, which stands for the Federal Insurance Contributions Act, comprises two components: Social Security tax and Medicare tax. While Social Security contributes to the Old-Age, Survivors, and Disability Insurance (OASDI), it is part of the broader FICA tax that also includes Medicare funding.

By identifying the FICA tax as the correct answer, it emphasizes the key role this tax plays in funding Social Security benefits, which provide financial support to retirees and individuals with disabilities. The other options listed do not pertain to Social Security contributions: state income tax is related to state-level taxation, Medicare tax is specifically designated for healthcare funding for the aged and disabled but exists alongside Social Security under the FICA umbrella, and federal income tax pertains to the income tax collected by the federal government, which is separate from FICA contributions.

Thus, the choice of FICA tax clearly links directly to the contributions necessary for Social Security, affirming its foundational importance in the payroll structure.

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