Assuming a Medicare tax rate of 1.45% and monthly gross wages of $2,500,the amount recorded in Medicare Tax Payable for one quarter for the employee's payroll deduction is
A) a debit for $36.25.
B) a credit for $36.25.
C) a debit for $108.75.
D) a credit for $108.75.

Question

Quizplus · Accepted Answer

The Medicare tax for one month is $2,500 * 1.45% = $36.25. For one quarter (3 months), it is $36.25 * 3 = $108.75. Since it's a payroll deduction, it is recorded as a credit in Medicare Tax Payable.

Assuming a Medicare Tax Rate of 1