Social Security and Medicare
All employees of the University, other than most student employees, are covered by Social Security and Medicare. Social Security and Medicare taxes, sometimes called FICA (Federal Insurance Contributions Act) taxes, are automatically deducted from your wages unless you are an exempt student employee.
The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 that became law on December 17, 2010 enacted a two percentage point payroll tax cut for employees, reducing their Social Security tax withholding rate from 6.2% to 4.2% of wages paid. The University implemented the adjustment and employees saw the change reflected on their 2011 Earnings Statements. The 4.2% employee rate was extended through the end of 2012. This reduced Social Security withholding will have no effect on the employee's future Social Security benefits.
Social Security provisions for 2012 and 2013 are:
- For 2012, the Social Security wage base is $110,100; the first $110,100 of an employee's wages is taxable for Social Security purposes.
- For 2013, the Social Security wage base is $113,700; the first $113,700 of an employee's wages is taxable for Social Security purposes.
- The University (employer) tax rate for Social Security remains unchanged at 6.2%.
- The Medicare wage base does not have a dollar limit in 2012 and 2013; an employee's entire wage is subject to a 1.45% tax rate for Medicare purposes.
- The University matching tax rate for Medicare remains unchanged at 1.45%.
The amount listed on employee Earnings Statements as SOC SEC is the total of the Social Security and Medicare tax withholding, which is sometimes referred to as Federal Insurance Contributions Act (FICA) tax.
Social Security provides you (and in some cases your spouse or former spouse) with a monthly retirement benefit at age 62 or later. In addition, you may qualify for disability benefits if you become unable to work before retirement age. If you die prematurely, Social Security provides your dependent children with support until age 18. Your spouse, parents, and disabled children may also be eligible for survivor's benefits.
Medicare provides you (and your spouse) with insurance coverage for some health care costs when you reach age 65. You may qualify for Medicare coverage earlier if you become disabled.
This document was last revised on October 23, 2012