Asteria earned a $25,500 salary as an employee in 2017.How much should her employer have withheld from her paycheck for FICA taxes (rounded to the nearest whole dollar amount)?

Question

Quizplus · Accepted Answer

FICA taxes consist of Social Security tax and Medicare tax. For Social Security tax, the rate is 6.2% of the first $127,200 of wages, which for Asteria would come to $1,579.40. For Medicare tax, the rate is 1.45% of all wages, which for Asteria would come to $370.25. Adding these two amounts together, we get $1,949.65, which when rounded to the nearest whole dollar is $1,951. Therefore, the employer should have withheld $1,951 for FICA taxes.

Asteria Earned a $25,500 Salary as an Employee in 2017