In December 2011,B.Rich worked for Payless,Inc.and earned $10,000.Federal income tax withholding is 20%.The FICA rate is 6.2% and the Medicare tax is 1.45%.How much cash will Payless pay the government for FICA because of B.Rich's December earnings?
A)$1,240
B)$2,765
C)$765
D)$1,530

Question

Quizplus · Accepted Answer

FICA tax is calculated as 6.2% of the employee's gross earnings. For B.Rich's December earnings of $10,000, the FICA payment would be 0.062 * $10,000 = $620. However, the question asks for the total amount Payless pays, which includes both the employee's and employer's contributions, doubling the amount to $620 * 2 = $1,240.