Syl Corp. does not withhold FICA taxes from its employees’
compensation. Syl voluntarily pays the entire FICA tax for its
share and the amounts that it could have withheld from the employees.
The employees’ share of FICA taxes paid by Syl to the
IRS is

Deductible by Syl as additional compensation that is
includible in the employees’ taxable income.
Not deductible by Syl because it does not meet the deductibility
requirement as an ordinary and necessary
business expense.
A nontaxable gift to each employee, provided that the
amount is less than $1,000 annually to each employee.
Subject to prescribed penalties imposed on Syl for its
failure to withhold required payroll taxes.