If the limit for Social Security (6.2%) is $113,700 and Medicare (1.45%) is applied to all earnings and Sally Reena's gross earnings this pay period are $7,300, with cumulative earnings prior to this pay period of $112,460, the amount of tax is

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Quizplus · Accepted Answer

For Social Security, the taxable amount would be $113,700 - $112,460 = $1,240. Therefore, the Social Security tax would be 6.2% of $1,240, which is $76.88. 
For Medicare, the tax rate is 1.45% on all earnings, so the tax would be 1.45% of $7,300, which is $105.85. Therefore, the total tax amount would be $76.88 + $105.85 = $182.73.

If the Limit for Social Security (6