Question

For each of the following wages, determine the Social Security tax that would be withheld. Use $106,800 for maximum taxable earnings.
i. $23,660
ii. $89,000
iii. $166,090
a.
i. $146.69
ii. $551.80
iii. $1,029.76
b.
i. $1,466.92
ii. $5,518.00
iii. $10,297.58
c.
i. $146.69
ii. $551.80
iii. $662.16
d.
i. $1,466.92
ii. $5,518.00
iii. $6,621.60

Answer 1

Social Security tax = 6.2% of wages up to $106,800.

i. 23,660 × 0.062 = $1,466.92
ii. 89,000 × 0.062 = $5,518.00
iii. taxable wage = $106,800 (cap) → 106,800 × 0.062 = $6,621.60

Answer: d.