Asteria earned a $25,500 salary as an employee in 2020. How much should her employer have withheld from her paycheck for FICA taxes? (Round your answer to the nearest whole dollar amount.)

Question

Quizplus · Accepted Answer

FICA taxes consist of Social Security taxes and Medicare taxes. In 2020, the Social Security tax rate was 6.2% on income up to $137,700 and the Medicare tax rate was 1.45% on all income. Therefore, Asteria's employer should have withheld $1,581 ($25,500 x 6.2% for Social Security + $25,500 x 1.45% for Medicare) from her paycheck for FICA taxes. Rounded to the nearest whole dollar amount, this is $1,951. Option C is the closest choice.

Asteria Earned a $25,500 Salary as an Employee in 2020