Question

Calculate the Social Security and Medicare tax that would be applied to an annual salary of $125,000. Use $106,800 for maximum taxable earnings.
a.
Social Security tax: $77,500.00, Medicare tax: $18,125.00
b.
Social Security tax: $7,750.00, Medicare tax: $1,812.50
c.
Social Security tax: $66,216.00, Medicare tax: $18,125.00
d.
Social Security tax: $6,621.60, Medicare tax: $1,812.50

Answer 1

Answer:

D. social security: 6621.60, Medicare: 1812.50

Step-by-step explanation:

Social security tax: 106800 x .062=6621.60

medicare tax: 125000 x .0145=1812.50

Answer 2

The Social Security tax is $6,621.60 and  Medicare tax is $1,812.50.

The given parameters:

• Tax on social security, = 6.2%
• Tax on annual salary = 1.45%
• Annual salary = $125,000
• Maximum taxable earnings = $106,800

What is social security tax?

This is a tax levied on both employers and employees to fund the Social Security programs.

The social security tax on the given earnings is calculated as follows;

Social security tax = 0.062 x 106,800 = $6,621.6

Medicare tax = 0.0145 x 125,000 = $1,812.5

Thus, the Social Security tax is $6,621.60 and  Medicare tax is $1,812.50.

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