Question

Calculate the Social Security and Medicare tax that would be applied to an annual salary of $235,430. Use $106,800 for maximum taxable earnings.
a.
Social Security tax: $1,459.67, Medicare tax: $341.37
b.
Social Security tax: $14,596.66, Medicare tax: $3,413.70
c.
Social Security tax: $662.16, Medicare tax: $341.37
d.
Social Security tax: $6,621.60, Medicare tax: $3,413.70

Answer 1

Answer: d.

Calculations:
- Social Security: taxable max $106,800 × 6.2% = $106,800 × 0.062 = $6,621.60
- Medicare: full salary $235,430 × 1.45% = $235,430 × 0.0145 = $3,413.74 (rounded $3,413.70)

(If the 0.9% Additional Medicare Tax on earnings over $200,000 were included, add $35,430 × 0.9% = $318.87 to Medicare.)