An employee earned $47,000 during the year working for an employer. 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) $681.50.
B) $2,914.00.
C) $3,595.50.
D) $7,191.00.
E) Zero, since the employee's pay exceeds the FICA limit.

Question

Quizplus · Accepted Answer

To calculate the employee's FICA taxes, we'll need to multiply their gross income of $47,000 by the Social Security and Medicare tax rates.

Social Security tax = 6.2% of $47,000 = $2,914.

Medicare tax = 1.45% of $47,000 = $681.50.

The total amount of FICA taxes paid by the employee for the year is $2,914 + $681.50 = $3,595.50.

Therefore, the best choice is C.

An Employee Earned $47,000 During the Year Working for an Employer