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Other federal laws and regulations (Federal Insurance Contributions Act (…
Other federal laws and regulations
Federal Insurance Contributions Act ( FICA)
Employer must match employee's contribution
Employee are liable to make contributions: 6.2% FICA, and Medicare 1.45% of gross wages
funded by both employers and employees
Self-employed: net profit not gross sales
Almost everyone
Only deductible by employer: ordinary business expense
Includes self-employed
Benefits
Unemployment compensation ( FUTA)
employers have quarterly payroll>$1500 or employ at least 1 person for 20 weeks in a year must participate
funded by employers only
state-run system
deductible by employer: ordinary business expense
Excludes self-employed
Employee's benefits are not limited to the contributions made on his behalf
Worker's compensation
funded by employers only
Most employers must participate
deductible by employer: ordinary business expense
injury occurred while acting in the scope of employment
GR: can't sue employer, but can sue 3rd parties
State-run program
Affordable Care Act
ALEs are required to provide affordable min health care coverage
Employees must buy; low-income get get a tax rebate
funded by employer and employee
Penalties
Employee: higher of 2.5% of household income or $695 per adult
Employer: subject to 1 penalty only
Type 1: you don't offer a plan
Type 2: you offer a bad plan
Employers and employees and required to participate
Not deductible