Question

Fiduciary Investments paid its employee, Yolanda, wages of $139,000 in 2019. Calculate the FICA tax:

If required, round your answers to two decimal places.

Withheld from Yolanda's wages:	Social Security	$
	Medicare	$
Paid by Fiduciary:	Social Security	$
	Medicare	$
Total FICA Tax		$

Answer 1

FICA tax is typically 7.65% of earnings up to $127,200 (2017 figure). Employees pay 6.2% of their earnings for Social Security retirement benefits and their employer pays 6.2% for a total of 12.4% of a worker’s income. An additional 1.45% tax is also collected to fund Medicare benefits and this, too, is matched by employers.

In the given question: follwoing calculation should happen:

Wages paid to employee =  Rs. 139000

Yolands's wages:

FICA Tax = 139000*6.2% =8618

Medicare benefit =  139000*1.45% =2015.5

Fiduciary paid to employee:

FICA Tax = 139000*6.2% =8618

Medicare benefit =  139000*1.45% =2015.5

Total FICA Tax: 8618 + 8618 = 17236

Medicare benefit: 2015.5 + 2015.5 = 4031