What Is The FICA Deduction On Payroll Checks?

In addition to the answer above, fica tax is composed of social security and medicare.  The breakdown is social security 6.2% and medicare is 1.45%.  Social security tax has a limit.  The limit for 2009 is $106,000.  Even though an employee may have reached their social security tax limit, they still need to pay medicare tax.  

FICA stands for the Federal Insurance Contributions Act.  This feeds Social Security.  Each employee and employer must pay 7.65% of gross pay into the fund.  Self-employed individuals must pay the full 15.3%.

Yea that's what FICA is. Your payroll services provider should be able to explain these deductions to you. That's also why it's a good idea to compare the actual services of each payroll company as well. Most small businesses outsource their payroll (either fully or partially with online payroll companies) to save time, money, and for the tax filing benefits.

Most of the top payroll companies offer tax filing services with their basic package, but each company charges a different fee (or no fee) for the service. For example, ADP charges a one-time fee of $30 for W2 services, then $5.40 per each employee. ADP may be a good option for your business if you have only a few employees -- if you have many employees, the fees will add up. Compared with Intuit Online Payroll, there is no tax fee but there is a $12 fee if you file taxes in additional states. When you're comparing payroll services costs, ask about tax filing fees.