The chief executive officer earns $20,000 per month.As of June 30,her gross pay was $120,000.The tax rate for Social Security is 6.2% of the first $127,200 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 4.4%.Both unemployment taxes are applied to the first $7,000 of an employee's pay.What is the amount of FICA- Social Security withheld from this employee for the month of July?

Question

Quizplus · Accepted Answer

First we need to calculate the CEO's monthly gross pay: $120,000 ÷ 6 = $20,000.
Next, we need to calculate the amount of Social Security tax withheld, which is 6.2% of $20,000 = $1,240.
Therefore, the answer is D, $446.40, which is 1/12 of the annual FICA - Social Security tax withheld.

The Chief Executive Officer Earns $20,000 Per Month