Question

TO MC QU. 09-85 An employee earned... An employee earned $44,800 during the year working for an employer when the maximum limit for Social Security was $128.400 The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 145% The employee's annual FICA taxes amount is

Answer 1

Calculation of the employee annual FICA Tax amount: Social Security ($44.800 * 6.2%) = Medicare ($44.800 * 1.45%) = Total FICA Tax $2,777.60 $649.60 $3,427.20 Note: FICA tax is a federal payroll tax paid by equally by the employee and employer and is intended to cover the payments for Social Security and Medicare when the employee reaches the eligible age. The tax is based on an employee's gross earnings and deducted from their paycheck.