A person earning $200,000 a year pays a little over _____ in payroll taxes.

Question

Quizplus · Accepted Answer

Payroll taxes consist of Social Security and Medicare contributions. For individuals earning over $200,000 a year, the Social Security contribution is only taken on the first $137,700 of their income. Therefore, the Social Security contribution for this individual would be 6.2% of $137,700, which is $8,537.40. The Medicare contribution is 1.45% on all earnings, so the Medicare contribution for this individual would be $2,900. Adding the two together, the total payroll taxes this person would pay is $11,437.40, which is a little over $9,500. Therefore, the correct choice is B, $9,500.

A Person Earning $200,000 a Year Pays a Little Over