Problema Solution
Solve the following problem using 6.2%, up to $113,700, for social security tax and 1.45%, no wage limit, for Medicare tax.
Kristy Dunaway has biweekly gross earnings of $1,750. What are her total social security and Medicare tax withholdings for a whole year?
Social security: $
Medicare: $
Answer provided by our tutors
Annual salary: 26*1,750 = $45,500
Social security: 45,500*0.062 = $2,821
Medicare: 45,500*0.0145 = $659.75