| Show Employers Employer's Share of FICA PICA Tax Expands Beginning in 1988 employers with tipped employees must pay FICA PICA Social Social Social So So- cial Security tax on the total amount of cash tips reported The Internal Revenue Service announced that under a new provision of the law all cash tips subject to employee FICA PICA tax are considered I wages making these tips subject to employers's employees FICA PICA Pre 88 law stated employers were not required to pay FICA PICA tax on tips unless they paid wages that were less than the federal minimum wage and wages paid were taxed The IRS stated the new law eliminates the benefit an employer with tipped employees receive all their compensation as salaries or wages Employees report to employers each month cash tips of 20 or withhold income tax and Social Social Soi So So- cial i Security tax or railroad retirement tax from the combined combined combined com com- tips and wages up to the Social Security wage base Form Employers Quarterly Federal Feder Tax Return is used to pay the taxes collected collected collected col col- col- col to IRS and explains how to report the employers employer's portion portion portion por por- tion of FICA PICA on tips |
