Michael Miller is paid twice a month and had total gross earnings as of 10/15 of $116,800. His gross earnings for the period ending 10/31 were $6,000. If social security taxes are 6.2% on a maximum earnings of $122,700 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 10/31?
A)Michael will pay $105.40 and his employer is not required to pay any social security tax.
B)Michael will pay $365.80 and his employer will also pay $365.80.
C)Michael will pay $372.00 and his employer will also pay $372.00.
D)Michael will pay $372.00 and his employer will pay $105.40.

Question

Quizplus · Accepted Answer

Michael's total earnings after the period ending 10/31 are $116,800 + $6,000 = $122,800. Since the maximum earnings for social security taxes are $122,700, only $122,700 - $116,800 = $5,900 of his earnings are subject to the 6.2% social security tax. Therefore, both Michael and his employer will pay 6.2% of $5,900, which is $365.80 each.

Michael Miller Is Paid Twice a Month and Had Total