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18 September, 09:30

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?

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  1. 18 September, 13:09
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    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
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