06/22/2026
Understanding F**A: More Than Just Payroll Deductions
Many employers know they must withhold Social Security and Medicare taxes from employee paychecks, but F**A involves much more than simply processing payroll.
As an employer, you're responsible for:
✔️ Withholding 6.2% Social Security tax and 1.45% Medicare tax from employee wages
✔️ Matching those contributions dollar-for-dollar
✔️ Properly handling bonuses, commissions, tips, and taxable fringe benefits
✔️ Understanding exemptions that may apply in specific situations
✔️ Managing complex rules surrounding Nonqualified Deferred Compensation (NQDC)
One area that often creates confusion is the special timing rule for NQDC, where F**A taxes may apply before the employee receives payment. Missing these details can lead to costly payroll tax corrections and compliance challenges.
Staying current on F**A requirements helps protect your business, maintain compliance, and avoid unnecessary penalties.
Read more about F**A and other industry-related articles in our newsletter:
https://newsletter.industrynewsletters.com/archive/newsletter/18031/13248291/5372239
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