What is the maximum FICA tax for 2010?

The maximum FICA tax for the year 2010 remains the same as the 2009 FICA tax: 7.65% on each employee’s first $106,800 of taxable earnings (such as wages, salaries, bonuses, etc.) plus 1.45% of any employee’s taxable earnings in excess of $106,800.

The FICA tax is withheld from each employee’s earnings and it is also matched by the employer. This means that the employer is required to remit 15.3% (employee’s 7.65% + employer’s 7.65%) of each employee’s first $106,800 of earnings in 2010 plus 2.9% (employee’s 1.45% + employer’s 1.45%) of any employee’s earnings greater than $106,800.

The FICA tax is really two taxes:

1. The Social Security tax of 6.2% which applies only to the first $106,800 of an employee’s taxable earnings (in year 2010 and in year 2009), and

2. The Medicare tax of 1.45% on every dollar of every employee’s taxable earnings.

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