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What is the definition of FICA tax?
FICA tax is a meaning of payroll taxes that are paid and are utilized in Social Security and Medicare under the Federal Insurance Contributions Act. The employees have them deducted and employers match these taxes. FICA tax is not voluntary and most workers in the United States are under its application. This is a difference to the income tax whereby the FICA tax contributions are destined to the social insurance benefits and not general government expenditures. FICA tax on a paycheck means that you are investing in your own retirement savings, disability insurance, and benefits based on healthcare via Medicare.
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