To date, Jay Ward has cumulative earnings of $107,600. This week he is paid $3,000. What is the total amount of Social Security tax for this week? Assume a rate of 6.2% on $110,100 for Social Security and 1.45% for Medicare. A. $186.00 B. $155.00 C. $57.66 D. $180.00

Question

Mathematics

Marilyn Russell

12 April, 04:23

To date, Jay Ward has cumulative earnings of $107,600. This week he is paid $3,000. What is the total amount of Social Security tax for this week? Assume a rate of 6.2% on $110,100 for Social Security and 1.45% for Medicare. A. $186.00 B. $155.00 C. $57.66 D. $180.00

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Ryland Vega · Answer 1

The 'cap' on earnings that can be taxed for Social Security is $ 97,500

The person has already been taxed on $ 95,000 of earnings.

So on this paycheck, only ($ 97,500 - $ 95,000) = $ 2,500 of his earnings are taxable for Social Security.

($ 2,500 x 0.062) = $ 155.00