Don't Blame Me, I Voted For Kerry Message Board

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Politics : Don't Blame Me, I Voted For Kerry

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To: Logain Ablar who wrote (10648)	3/29/2004 10:16:01 PM
From: CalculatedRisk	Read Replies (3) of 81568

This is a common question: Who pays FICA? Lets take 3 examples with an employee making $10 per hour (no other benefit, starting with current situation). 1) Current situation (rounded off to 7.6% each): Employer pays $10.76 per an hour of labor. Employee receives $10.00 gross, minus another $0.76 FICA. Total FICA payment $1.52 2) Employer pays all: Employer pays $10.76 Employee receives $9.24 Total FICA payment $1.52 3) Employee pays all: Employer pays $10.76 Employee receives $10.76 gross, minus $1.52 FICA Total FICA payment $1.52 All three are the same! Who paid the FICA in each case? The answer is the employee (unless you are analyzing labor costs for the employer, but that is a different question). The employee is paying $1.52 in taxes on $10.76 in income. The reason the employee "paid the FICA" is that the employee receives the entire (and same) future benefit under all 3 plans. The company doesn't care if the $10.76 went to the employee as take home pay, insurance, FICA or any other expense. I hope I explained this clearly.

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