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. (Soc Sec 6.2%, taxed up to $106,800 and Medicare 1.45%).
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

Social Security tax = 106,800 × 6.2% = $6,621.60
Medicare tax = 125,000 × 1.45% = $1,812.50

Answer: d.