Is the tax rate for Medicare and Social Security high?

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Medicare and Social Security Tax Rate High?

On my pay stub and my employees, the Medicare / EE rate is 1.62% and the Social Security OASDI / EE rate is 7%. Shouldn’t they be 1.45% and 6.2% respectively? It seems this is for the whole company … I have searched for an answer and no one is answering. Is there a reasonable explanation for this before I get pissed off? Thanks

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This thread was originally published on 2021-03-15 09:20:59.

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7 thoughts on “Is the tax rate for Medicare and Social Security high?”

  1. does it actually state the % or is it a calculation you are doing? If it is a calculation, make sure you are using the correct wage base. Is there anything in this check that is “imputed income” — that is a taxble benefit that you but where you don’t get the income. Say you got a gift from the employer like a new TV where they had to tax you on the value or something like having access to a company car for your commute where you are taxed on that value quarterly?…….anything like that in this pay period?

  2. This issue has been resolved.
    FICA taxable income is different that Fed Taxable Income.
    It was explained by PR Department.
    Our pay stubs showed Fed Taxable Income followed by the Fed Tax , Med Tax and then SS Tax but did not distinguish the different taxable amounts. I crunched numbers again and it made sense.
    Thanks for your input on this Reddit Peeps!

  3. Is this on multiple checks in a row?

    If it is just one check, it might be a correction. It might take some digging to figure it out, but your PR/HR dept should be able to provide an explanation if this is the case.

    This is just our software, but the only reason the withholdings would vary from the standard rates is if there was some kind of under or over withholding on a prior check. The logic used is the program calculates the YTD tax on YTD taxable wages and then subtracts what has previously been withheld to determine the amount to withhold on the new check. This ensures that after every check, the SS/Medicare withholdings match exactly 6.2%/1.45% (rounded to the nearest cent) for each employee.

    Examples of where you might a (one time) adjustment is if someone sets up a pre-tax deduction in the payroll system incorrectly. Let’s say a cafeteria plan was set up as taxable for FICA, then you would have more tax withheld than should have been, and when the error is corrected your next check would show less than 6.2%/1.45%. Or if a 401(k) plan were set up incorrectly as exempt from FICA, then you would have had tax under-withheld while that was in effect, and when the error is corrected one check should catch up by withholding more than the standard 6.2%/1.45%.

    If your check stub has YTD totals, you could check the amounts on a year to date basis taking into account any pre-tax deductions you might have.

  4. Yes it should be but what is the history? Did the company not withhold the correct amount on a previous check? Did the company not withhold for the last quarter of 2020?


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