Find the Social Security tax for the current pay period. Assume a 6.2% FICA rate up to a maximum of $115,000.
-Gross Earnings This Year: $110,965 45) Current Period Earnings: $5,636

Question

Quizplus · Accepted Answer

The Social Security tax rate is 6.2% on earnings up to a maximum of $115,000. In this case, the employee has already earned $110,965 this year, leaving only $4,035 for the current period. Since $4,035 is below the maximum taxable earnings amount, the Social Security tax would be calculated as 6.2% of $4,035, which is $250.17. Therefore, the correct answer is C. To calculate the Social Security tax, we first need to determine if the employee has reached the maximum taxable earnings for the year. In this case, the gross earnings for the year are $110,965, which is below the maximum of $115,000. Therefore, we can apply the full 6.2% FICA rate to the current period earnings of $5,636.

Social Security tax = 6.2% x $5,636 = $349.43

The closest answer choice is C) $250.17, which is incorrect, so the correct answer must be D) $349.43.

Find the Social Security Tax for the Current Pay Period