FICA means the US Federal Insurance Contributions Act. It funds US Social Security and Medicare through payroll taxes. It is not an Australian business insurance policy or an Australian payroll deduction called “FICA”.
Why the distinction matters
US Medicare and Australian Medicare are different systems. A US explanation of FICA does not establish an Australian employer’s obligations or an Australian worker’s entitlement to benefits. Do not apply US wage caps, contribution rates or eligibility rules to Australian payroll.
If you work across borders
Ask a suitably qualified cross-border tax adviser which country’s rules apply to your employment and circumstances. Residency, where work is performed and social security arrangements can matter. This article does not determine your tax position.
Check the primary source
The IRS explanation of Social Security and Medicare withholding sets out the US rules and current wage base. We have removed the previous article’s incorrect year-specific wage-cap claims. Use the IRS for current US figures rather than treating an Australian comparison as US payroll advice.
For Australian business cover, use our business insurance guide or industry directory. Insurance referrals do not provide tax advice.