Question

In 2005, Roger Thomas owned a small company with 4 employees who had gross annual earnings of $51,400, $37,500, $49,250, and $32,750. How much FICA tax did thecompany owe on these employees (include both the employee and employer share)? Note: FICA tax rate = 7.65% for both.$25,876.56$25.995.44$26,084.39$26,147.70None of these choices are correct

Answer 1

The employer share is given by

FICA tax for employer = 7.65% x (51400 + 37500 + 49250 + 32750) = 7.65% x 170900

FICA tax for employer = $13073.85

The employee share is given by

FICA tax for employee = 7.65% x (51400 + 37500 + 49250 + 32750) = 7.65% x 170900

FICA tax for employee = $13073.85

Hence, the total tax is given by

$\text{ \ 13073.85 + \ 13073.85 = 26147.70}$