On a pay stub MED is the shortened code for Medicare tax and FICA is the shortened code for Federal Income Contributions Act. Both of these deductions contribute to some sort of long term plan that should help you out should there be a problem with your health (MED) or for when you retire (FICA).
Medicare tax is typically deduction pre-tax or taken before your income tax and social security taxes are calculated. Some employers will have a slightly different plant that means that this Medicare tax is actually taken post-tax or after all of the other taxes have been calculated. Medicare tax is particularly beneficial if it is taken as a pre-tax deduction because it will help to reduce your taxable earnings. A person who earns $1,000 who does not have their Medicare tax taken out pre-tax, will be taxed on the full $1,000. A person who gets paid $1,000 but does have a pre-tax medical deduction, will only be taxed on $900. This means that the person's net pay, or take home, pay is greater. Medicare tax is taken to contribute towards the cost of running the Medicare program. Anyone who is paying Medicare tax is entitled to use the Medicare facilities available at their employer.
FICA (Federal Income Contributions Act) is often referred to as Social Security tax. These taxes can be described as a contribution towards the social insurance system. A person who has paid Social Security tax throughout their career will be entitled to a certain amount of money once they retire. At the age of 62, workers will be able to retire and receive monthly checks from the Social Security system. If an individual waits until they are 65 to receive these benefits, their pay checks will be increasingly larger. If a person passes away while they are still entitled to Social Security checks, they can be passed on to a spouse and minor child.
Medicare tax is typically deduction pre-tax or taken before your income tax and social security taxes are calculated. Some employers will have a slightly different plant that means that this Medicare tax is actually taken post-tax or after all of the other taxes have been calculated. Medicare tax is particularly beneficial if it is taken as a pre-tax deduction because it will help to reduce your taxable earnings. A person who earns $1,000 who does not have their Medicare tax taken out pre-tax, will be taxed on the full $1,000. A person who gets paid $1,000 but does have a pre-tax medical deduction, will only be taxed on $900. This means that the person's net pay, or take home, pay is greater. Medicare tax is taken to contribute towards the cost of running the Medicare program. Anyone who is paying Medicare tax is entitled to use the Medicare facilities available at their employer.
FICA (Federal Income Contributions Act) is often referred to as Social Security tax. These taxes can be described as a contribution towards the social insurance system. A person who has paid Social Security tax throughout their career will be entitled to a certain amount of money once they retire. At the age of 62, workers will be able to retire and receive monthly checks from the Social Security system. If an individual waits until they are 65 to receive these benefits, their pay checks will be increasingly larger. If a person passes away while they are still entitled to Social Security checks, they can be passed on to a spouse and minor child.