Assume that social security taxes are payable at a 6% rate and Medicare taxes are payable at a 1.5% rate with no maximum earnings,and that federal and state unemployment compensation taxes total 4.6% on the first $7,000 of earnings.If an employee earns $2,500 for the current week and the employee's year-to-date earnings before this week were $6,800,what is the total payroll taxes related to the current week?
A)$187.50
B)$196.70
C)$344.50
D)$9.20

Question

Quizplus · Accepted Answer

The total payroll taxes include Social Security (6% of $2,500), Medicare (1.5% of $2,500), and unemployment taxes (4.6% on the first $200 of earnings this week, since the employee's year-to-date earnings were $6,800). Calculating these gives $150 for Social Security, $37.50 for Medicare, and $9.20 for unemployment, totaling $196.70.

Assume That Social Security Taxes Are Payable at a 6