The Federal Insurance Contributions Act (FICA) requires that your employer deduct a total of 7.65 percent from your paycheck for Social Security and Medicare tax purposes. A Social Security rate of 6.2 percent is deducted on the first $90,000 you earn. A Medicare rate of 1.45 percent is deducted from all your earnings. In addition, your employer is required to pay an amount equal to your contribution.
Tax Withheld = Gross Pay x Tax Rate
Example
Find the amount deducted for Social Security and Medicare taxes.
Adrian Dunbar’s weekly pay is $1,750. What amount is deducted from his pay this week for Social Security taxes? For Medicare taxes?
- Find the amount deducted for Social Security.
$1,750 x 6.2% = $108.50 deducted for Social Security - Find the amount deducted for Medicare
$1,750 x 1.45% = $25.38 deducted for Medicare
Practice
For problems 1–3, find the combined Social Security and Medicare taxes withheld for the pay period.
1. Weekly salary: $650; earnings to date: $30,000.
2. Biweekly salary: 1,850; earnings to date: $37,000.
3. Monthly salary: $8,500; earnings to date: $86,500.
4. A nurse’s aide has earned $21,670. She earned $1,970 this month. How much is deducted this month for Social Security? For Medicare?
5. A real estate agent has earned $92,000. He earned $2,500 this month. How much is deducted this month for Social Security? For Medicare?
6. A teacher has earned $20,385. She earned $1,020 this biweekly pay period. How much is deducted this pay period for Social Security? For Medicare?
7. A beautician has earned $26,549. She is married and claims 1 federal allowance. How much is deducted from her weekly $549 paycheck for federal income tax, for Social Security, and for Medicare?
8. Standardized Test Practice: Michaela Jordan is a tax lawyer who earns $132,000 per year and is paid at the end of every month. What is the combined amount withheld from her September paycheck for Social Security and Medicare?
A. $765.00 B. $283.50 C. $620.00 D. $145.00
(source) – edited for correctness