Wages include salaries, vacation allowances, bonuses, commissions, and fringe benefits. It does not matter how payments are measured or paid. See the table on pages 15 through 19 for exceptions to taxes on wages. See sections 5 and 6 for a discussion of how the rules apply to tips and farmworkers. Social security and Medicare taxes apply to most payments of sick pay, including payments by third parties such as insurance companies.
Special rules apply to the reporting of third-party sick pay.
For details, see Pub. However, see Fringe Benefits later. Except for farmworkers and household employees, this kind of pay may be subject to social security, Medicare, and FUTA taxes. For information on back pay, see Pub. 957, Reporting Back Pay and Special Wage Payments to the Social Security Administration.