During 2013, Scott Howell received a salary of $125,000. The social security base amount for 2013 was $113,700. How much payroll tax should have been withheld from Scott's salary for 2013?

Question

Quizplus · Accepted Answer

Social security tax is 6.2% of the first $113,700 of wages. 
$113,700 * 6.2% = $7,049.40, which is the maximum social security tax for 2013. 
Therefore, the amount of payroll tax withheld from Scott's salary would be $7,049.40. However, since Scott's salary was only $125,000, the actual amount of payroll tax withheld would be slightly lower than $7,049.40. 
Using the formula: 
Payroll tax = (Salary * Social security tax rate) + (Salary * Medicare tax rate) 
= ($113,700 * 6.2%) + ($125,000 * 1.45%) 
= $7,049.40 + $1,812.50 
= $8,861.90 
Therefore, the correct answer is D.

During 2013, Scott Howell Received a Salary of $125,000