What is the correct deduction type for employee payroll contributions toward FICA?

The correct deduction type for employee payroll contributions toward FICA (Federal Insurance Contributions Act) is categorized as withholding tax. FICA includes both Social Security and Medicare taxes, which employers are required to withhold from employees' wages to fund these federal programs.

Withholding taxes are amounts that employers must withhold from their employees' paychecks for federal, state, and local taxes. This type of deduction is specifically set apart because it represents money that is collected and then remitted to the government on behalf of the employee, fulfilling the legal obligation for tax contributions. Essentially, withholding taxes ensure that employees indirectly pay their taxes as they earn income.

In the context of FICA, the contributions are mandated by law, and the amounts withheld are a percentage of the employee's gross wages. This systematic deduction allows for the timely collection of funds necessary for social programs and provides financial support for retirees and individuals with disabilities.

The other options do not accurately describe the nature of FICA contributions. An accrued expense typically refers to costs that have been incurred but not yet paid, a personal exemption allows for a reduction in taxable income based on personal statuses (like dependents), and a tax deduction is a broader term often used for various expenses that can reduce taxable income but does