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Social Security and Medicare Taxes
In addition to the basic income tax all wage earners must pay, the federal government collects a Social Security tax. Employers also pay Social Security tax. An employee pays 6.2 percent of his wage for Social Security taxes, which is withheld from his paycheck. The employer matches the employee’s tax amount and the employer pays both portions to the federal government. These taxes go to support benefits paid out by the Social Security Administration.
Like Social Security taxes, Medicare taxes are withheld from an employee’s wages, matched by the employer and remitted to the federal government to cover the cost of the Medicare program. The federal Medicare program pays the medical care of individuals more than 65 years of age, regardless of income.