Baker earned $225,000 of salary as an employee in 2013.How much should his employer have withheld from his paycheck for FICA taxes (rounded to the nearest whole dollar amount) ?

Question

Quizplus · Accepted Answer

The FICA tax consists of two parts:
1. Social Security tax of 6.2% on wages up to $117,000 (in 2013) 
2. Medicare tax of 1.45% on all wages.
So, for Baker:
Social Security tax = 6.2% * $117,000 = $7,254
Medicare tax = 1.45% * $225,000 = $3,263
Total FICA tax = $7,254 + $3,263 = $10,517, which rounds to $10,537 (nearest dollar). 
Therefore, the best choice is A.

Baker Earned $225,000 of Salary as an Employee in 2013