Asteria earned a $25,500 salary as an employee in 2014. 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 two parts: Social Security tax and Medicare tax. In 2014, the Social Security tax rate was 6.2% and the Medicare tax rate was 1.45%. Therefore, Asteria's employer should have withheld 6.2% of $25,500 (which is $1,581) for Social Security tax and 1.45% of $25,500 (which is $370) for Medicare tax. Adding these two amounts together, we get a total of $1,951, which is closest to choice C.

Asteria Earned a $25,500 Salary as an Employee in 2014