Gainesville Truck Center
This company has a weekly payroll of $10,000 for its employees who work Monday through Friday. Federal and state income taxes are withheld in the amounts of $1,700 and $400, respectively, and FICA taxes are withheld at a mandatory rate of 7.65% (6.2% for Social Security and 1.45% for Medicare). In addition, the federal and state unemployment taxes are applied at rates of 2% and 5%, respectively. The company's year-end is December 31.
-Refer to Gainesville Truck Center. Which of the following statements is true regarding the FICA taxes that must be recorded?

Question

Quizplus · Accepted Answer

The FICA taxes that must be recorded include both Social Security tax and Medicare tax. The total FICA tax rate is 7.65%. Therefore, the Social Security tax rate is 6.2% and the Medicare tax rate is 1.45%. To calculate the Social Security tax expense, we need to multiply the total payroll by the Social Security tax rate: $10,000 x 6.2% = $620. To calculate the Medicare tax expense, we need to multiply the total payroll by the Medicare tax rate: $10,000 x 1.45% = $145. Therefore, the correct option is C.

Gainesville Truck Center This Company Has a Weekly Payroll of $10,000 for Its