Federal Insurance Contributions Act
Updated: 04 November 2024
What Does Federal Insurance Contributions Act Mean?
The Federal Insurance Contributions Act (FICA) is a U.S. law enacted in 1935 that requires employees to contribute a percentage of their earnings, with employers matching this amount, to fund public health insurance and Social Security.
Insuranceopedia Explains Federal Insurance Contributions Act
Under FICA, an employee must contribute a portion of their salary to Medicare and Social Security, with the employer matching this contribution. The contribution amount is based on the employee’s income.
Individuals who belong to religions that oppose insurance are exempt from this requirement, provided that both the employer and the employee follow the same religion to qualify for the exemption.
