Which act mandates the withholding of a percentage of an employee's salary for social security?

The Federal Insurance Contributions Act (FICA) is the legislation that mandates the withholding of a percentage of an employee's salary for Social Security and Medicare taxes. Under FICA, both employees and employers contribute to funding these social insurance programs. The act outlines the specific percentages to be withheld and is crucial for maintaining the financial support of Social Security benefits for retirees, disabled individuals, and survivors of deceased workers.

FICA applies to nearly all wage earners, ensuring a broad base of funding for these critical government programs. This makes understanding FICA essential for anyone working in tax preparation or payroll processing, as compliance with these withholding requirements is necessary for proper tax reporting and employee benefit eligibility.