The chief executive officer earns $20,000 per month. As of May 31, her gross pay was $100,000. The tax rate for Social Security is 6.2% of the first $118,500 earned each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay.
-What is the amount of FICA - Medicare withheld from this employee for the month of June?

Question

The chief executive officer earns $20,000 per month. As of May 31, her gross pay was $100,000. The tax rate for Social Security is 6.2% of the first $118,500 earned each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. 
-What is the amount of FICA - Medicare withheld from this employee for the month of June?

Quizplus · Accepted Answer

The FICA - Medicare tax rate is 1.45% of all earnings. For June, the CEO earns $20,000. Therefore, the Medicare tax withheld is 1.45% of $20,000, which equals $290.00.

The Chief Executive Officer Earns $20,000 Per Month