Employee Rouche has cumulative earnings before the current p

Employee Rouche has cumulative earnings before the current pay period of $112400. This pay period he earns $7000. What will be the deductions in his paycheck for social security and Medicare(assume a social security base of $118500

Solution

Social security tax = 6.2%

Medicare tax = 1.45%

The social security tax base is $ 118,500, hence the amount of earnings this month subject to social security tax is $ 6100

Social security tax = 0.062 * $ 6100

Social security tax = $ 378.20

Medicare tax = 0.0145 * $ 7000

Medicare tax = $ 101.50