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United States of America. Federal Insurance Contributions Act (FICA) tax (/ËfaÉªkÉ/) is a United States federal payroll (or employment) tax imposed on both employees and employers to fund Social Security and Medicareâfederal programs that provide benefits for retirees, the disabled, and children of deceased workers.
In the U.S., if you work in a job subject to Social Security taxes, your paycheck shows a deduction called FICA. This abbreviation refers to the Federal Insurance Contributions Act, which gives the national government the authority to collect these taxes.