An employer is liable for the following federal
One-half of social security taxes
One-half of Medicare
Federal unemployment insurance tax (FUTA
FICA taxes include: social security and Medicare taxes. (FICA stands for Federal Insurance Contributions Act.)
Social Security Tax
Be aware, contractors do not have any payroll taxes taken out.
For 2012, the employee's share of the social security tax rate is reduced to 4.2%, from 6.2%, a 2% reduction. However, the employer's share of the tax remains 6.2%.
No change in 2012 for the Medicare tax; it remains 2.9%. The employer and employee each pay half of the 2.9% rate, 1.45%.
Federal Unemployment Taxes (FUTA)
FUTA tax is strictly an employer tax. Employees do not pay this tax. Only gross wages up to $7,000 paid to each employee is assessed FUTA taxes. For example, if you have two employees and paid gross wages of $15,000 to one of them and $6,000 to the other, total FUTA wages subject to the tax is $13,000 ($7,000 plus $6,000).