Davis and Thompson have earnings of $850 each. The social security tax rate is 6% and the Medicare tax rate is 1.5%. Assuming that the payroll will be paid on December 29, what will be the employer's total FICA tax for this payroll period?
A) $102.00
B) $127.50
C) $96.00
D) $25.50

Question

Quizplus · Accepted Answer

Earnings subject to 6% social security tax and 1.5% Medicare tax = $850 × 2 = $1,700; Total FICA tax = Social security tax + Medicare tax; Total FICA tax = ($1,700 × 6%) + ($1,700 × 1.5%) = $102.00 + $25.50 = $127.50

Davis and Thompson Have Earnings of $850 Each