FICA (OASDI) Social Security Tax

Vision calculates Social Security tax based on the employee's gross wages.

How Vision Calculates Tax

To calculate an employee's Social Security tax, Vision does the following:

1. Subtracts any 125/Cafeteria Plan contributions from the employee's gross wages.

2. Multiplies the resulting amount by 6.2% to a maximum wages amount of $117,000 (2014 tax year) to determine the employer’s Social Security liability. The resulting amount (to a maximum wages amount of $117,000 in the 2014 tax year) is also multiplied by 6.2% to determine the employee’s Social Security liability.

Employer FICA amounts are calculated in each payroll run and posted as part of a combined FICA liability, but are not stored as a separately reportable value. Previous to 2011, the System FICA rates in Vision were 6.2% for Social Security (OASDI) and 1.45% for Medicare (HI), and the employer portion would double whatever amount was deducted from the employee, the result being that both the employer and employee portions were annualized.

Vision now takes a flat withholding percentage of the taxable wages for the employer FICA-OASDI when the withholding is set to System and is Active. This employer liability is not annualized. As a result, there will be a rounding difference between the payroll deductions and the 941 liability for the employer liability. When the FICA-OASDI withholding is not set to System or is inactivated, no employer portion is posted. The 941 report will always reflect the 6.2% liability owed, regardless of withholding method.