You pay 5.65% on the first $110,000 of income and 1.45% in excess of $110,000.

Question

stion 1
stion 2
Calculate the FICA tax for an employee who earns $60,000 a year.

Answer 1

To calculate the FICA tax for an employee who earns $60,000 a year, we will apply the given rates to the income.

1. Identify the applicable tax rates:

   • For income up to $110,000, the tax rate is 5.65%.
   • For income above $110,000, the tax rate is 1.45%. Since the employee earns $60,000, we will only use the first rate.

2. Calculate the FICA tax:

   • FICA Tax = (Income) × (Tax Rate)
   • FICA Tax = $60,000 × 5.65%

Now, let's perform the calculation:

\[ FICA Tax = 60,000 \times 0.0565 = 3,390 \]

Therefore, the FICA tax for an employee who earns $60,000 a year is $3,390.