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Yesterday, 02:15

Renae Walters is paid a salary of $9,000 per month.

a. How much is deducted in January for Social Security? For Medicare?

b. How much is deducted in November for Social Security? For Medicare?

c. How much is deducted in December for Social Security? Medicare?

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Answers (1)
  1. Yesterday, 04:44
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    The amount for social security for all 3 months will $558 and the contribution for medicare will be $130.5

    Step-by-step explanation:

    Given that the salary is paid in US dollars, we can assume that Renae Walters falls under the social security and medicare tax rates for the United States. These rates, as of 2020, fall at 6.2% for social security and 1.45% for medicare.

    By formula:

    -Social security contribution = Social security tax rate * Income earned

    January for example Social Security = 0.062 * $9000 = $558

    -Medicare contribution = Medicare tax rate * Income earned

    January for example Medicare = 0.0145 * $9000 = $130.5

    The above method will apply through the months without changes.

    Remember: The social security wage base for 2020 is fixed at $137,700. Any income above this amount is not subject to social security tax. This implies that if the total yearly income is above $137,700, the individual is only liable to pay for the amount below. In this case, this is not possible as the yearly income reaches $108,000 and hence payment has to be made for all 12 months. There is no wage base for medicare, so payments remain unaffected.
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