Michael Miller had total gross earnings as of 10/15 of $113,000.His gross earnings for the period ending 10/30 were $2,000.If social security taxes are 6.2% on a maximum earnings of $113,700 per year and Medicare tax is 1.45% on all earnings,how much social security tax will be paid by Michael and how much will be paid by his employer for the period ending 10/30?
A) Michael will pay $43.40 and his employer is not required to pay any social security tax.
B) Michael will pay $43.40 and his employer will also pay $43.40.
C) Michael will pay $124 and his employer will also pay $124.
D) Michael will pay $124 and his employer is not required to pay any social security tax.

Question

Quizplus · Accepted Answer

The maximum taxable earnings for social security tax is $113,700 per year. As of 10/15, Michael has already earned $113,000, so his earnings for the period ending 10/30 ($2,000) are still within the taxable limit.

To calculate social security tax, we multiply the earnings by the tax rate of 6.2%. 
For Michael: $2,000 x 0.062 = $124 
For his employer: $2,000 x 0.062 = $124

Therefore, Michael will pay $124 and his employer will also pay $124 for social security tax for the period ending 10/30.

Michael Miller Had Total Gross Earnings as of 10/15 of $113,000.His