Question

Davis and Thompson have earnings of $850 each. The social security tax rate is 6% and the Medicare tax rate is 1.5%. Assuming that the payroll will be paid on December 29, what will be the employer's total FICA tax for this payroll period?

Answer 1

Answer:

total FICA tax for this payroll period =  $127.50

Explanation:

given data

earnings of each =  $850

social security tax rate = 6%

Medicare tax rate = 1.5%

to find out

what will be the employer's total FICA tax for this payroll period

solution

employer's total FICA tax for this payroll period is sum of Social security tax and  Medicare tax for Employee and Employer    ...................1

we first find here Medicare tax for Employee and Employer that is

Medicare tax for Employee and Employer =  earnings of each  × Medicare tax rate  × number

Medicare tax for Employee and Employer =  $850 × 1.5% × 2

Medicare tax for Employee and Employer =  $25.50

and

Social security tax is same that is = $850 × 6%  × 2

Social security tax for Employee and Employer = $102

so

total FICA tax for this payroll period = $25.50 + $102

total FICA tax for this payroll period =  $127.50