FICA
FICA is the federal payroll tax funding Social Security and Medicare: 6.2 percent each from employer and employee up to the annual Social Security wage base, plus 1.45 percent each for Medicare.
The Social Security portion applies only up to an annual wage base that adjusts each year, while Medicare has no cap and adds a 0.9 percent employee surtax above a threshold. Because the wage base is annual and per-employer, anything that changes the employer of record mid-year can affect how much Social Security tax is collected.
If wage bases restart because the reporting employer changed without successor treatment, both the company and its employees can pay additional Social Security tax during the year. Before a midyear PEO entry or exit, require an employee-level analysis under the applicable CPEO or successor-employer rules.