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Compare how Medicare taxes are paid by individuals who are employees to those who are self-employed.(1 point)

Responses

Employees do not pay the Medicare tax and the employer pays for both halves of the tax (2.9%). Self-employed individuals pay for both halves of the tax (2.9%).
Employees do not pay the Medicare tax and the employer pays for both halves of the tax (2.9%). Self-employed individuals pay for both halves of the tax (2.9%).

Employees pay for both halves of the tax (2.9%) and the employer does not pay the Medicare tax. Self-employed individuals do not pay Medicare tax.
Employees pay for both halves of the tax (2.9%) and the employer does not pay the Medicare tax. Self-employed individuals do not pay Medicare tax.

Employees pay half (1.45%) of the Medicare tax while the employer pays the other half. Self-employed individuals pay half (1.45%) of the Medicare tax.
Employees pay half (1.45%) of the Medicare tax while the employer pays the other half. Self-employed individuals pay half (1.45%) of the Medicare tax.

Employees pay half (1.45%) of the Medicare tax while the employer pays the other half. Self-employed individuals pay for both halves of the tax (2.9%).

1 answer

The correct comparison of how Medicare taxes are paid by employees and self-employed individuals is:

Employees pay half (1.45%) of the Medicare tax while the employer pays the other half. Self-employed individuals pay for both halves of the tax (2.9%).

To clarify: Employees have 1.45% of their earnings withheld for Medicare tax, and their employer also contributes an additional 1.45%. In contrast, self-employed individuals are responsible for the full 2.9% Medicare tax, which they calculate on their net earnings from self-employment.