USA Percentage basis salary Employee gets deduction on FICA, State Unemployment and Federal Unemployment

[Rocky]

Hello,

I have scenario on H1 visa salary based on percentage.
Percentage agreed for the employee is 80-20. 20% is taken as profit by the employer.
Employer levies FICA, State Unemployment and Federal Unemployment tax on the 80% of the employee deserved. So it goes down to 71% now.
And then the employee also pays his share of taxes in the payroll(Federal, Social Security, Medicare, State taxes) on the 71% of what he is earning.
Basically employee is taxed twice.
Is this common process or something not right?

Thanks

 

[kirby]

Assume your employer bills $10,000 for your work.
So based on your agreement, employer keeps $2,000 and you get $8,000 before taxes.
We will only follow the FICA. We will assume FICA is the only tax for this example.
FICA is a 6.2% tax on both the employer and the employee.
So employer has to pay 6.2% times $8,000 = $496 out of employer's own money - not yours.
Employer pays you your $8,000 less $496 , which is the FICA tax applied to you.
So you should get $7,504.
If that is not what is happening, then either employer is stupid or dishonest.
Neither one is good.