Art Panache, the sole employee of Panache Sales, has gross salary for March of $5,000. The entire amount is under the OASDI limit of $110,100, and thus subject to FICA. The total amount of employee FICA tax is $565. (Assume a FICA-OASDI Tax of 4.2% and FICA-Medicare Tax of 1.45%.)

Question

Quizplus · Accepted Answer

The FICA-OASDI tax is 4.2% of $5,000, which is $210, and the FICA-Medicare tax is 1.45% of $5,000, which is $72.50. The total FICA tax is $282.50, not $565.

Art Panache, the Sole Employee of Panache Sales, Has Gross