An employee earned $37,000 during the year working for an employer when the maximum limit for Social Security was $118,500. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The employee's annual FICA taxes amount is:
A) $2,830.50.
B) $1,757.50.
C) $8,950.50.
D) $536.50.
E) $2,294.00.

Question

Quizplus · Accepted Answer

The employee's annual FICA taxes amount is $2,830.50. This is calculated by multiplying the employee's earnings by the FICA tax rate for Social Security (6.2%) and the FICA tax rate for Medicare (1.45%).

An Employee Earned $37,000 During the Year Working for an Employer