FICA:
Federal Insurance Contributions Act
FICA, an abbreviated way of
saying Federal Insurance Contributions Act,
is a law requiring the withholding of a certain
percentage of paychecks by employers. The
money collected by withholding is used to
pay for Medicare and Social Security. However,
there are many aspects of FICA taxes that
must be addressed when calculating
payroll. For example, there are different
rules and taxes for regular workers than there
are for the self-employed and full-time students.
An experienced employee leasing company or
PEO should have intimate knowledge of all
Federal rules and regulations, including those
pertaining to FICA. When choosing a PEO, be
sure to ask about the services they offer
for payroll. Further, be sure that your employee
leasing company is aware of any state regulations.
Once you have found a quality PEO, you can
simply give them the amount of hours for payroll,
and then you can get back to your business
without having to worry.
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