Calculating Fica on cafeteria payroll when nearing the maximum fica

[Guest Kathy Lorenzo]

I write payroll programs. I am confused about calculating tax on Cafeteria plan when it comes to the FICA max. Example, an employee makes $1500 a week, and his cafeteria is $100 a week. He is taxed $1400 for Federal, State, fica and medicare. When he hits the ficamax, should he continue to be taxed for fica on his ytd less cafeteria? So, if this year, he hits $80,400 in November, and has had $4000 deducted under cafeteria, should we stop taking any more fica, or keep going as if he was being taxed on 80,400 less 4,000? Does he need to pay the full $4984.40?

[SLuskin]

You continue to pay fica until you have hit the maximum to which it is subject. So, if an employee has an original starting income of $90,000, and is pretaxing $10,000 this year, all of the income that the employee receives outside the plan will be taxed at the 7.65% employee and 7.65% employer. Once the limit has been reached, if the employee still has more earnings (outside the cafeteria plan) he is only taxed the 1.45% medicare and the employer pays the matching 1.45%.