What does FICA require from employers in relation to employee salaries?

FICA, or the Federal Insurance Contributions Act, mandates that employers withhold a specific percentage of employees’ salaries for Social Security and Medicare taxes. This withholding is a critical part of federal payroll tax regulations, ensuring that funds are collected to support these essential programs. The requirement is that employers deduct this set percentage from each paycheck and also contribute an equivalent amount from their own funds, which demonstrates the shared responsibility of funding Social Security and Medicare benefits for current and future retirees.

In contrast, negotiating salary increases, providing annual bonuses, and offering retirement plans are all optional employer practices and are not dictated by FICA. While these may contribute to employee benefits or compensation strategies, they do not fall under the legal obligations established by FICA. Thus, the responsibility to withhold a specified percentage for Social Security is the correct focus when discussing what FICA requires from employers regarding employee salaries.