Question

An employee whose earnings subject to Social Security during the first week of the year are $1,720 owes Social Security tax of $ .

Answer 1

The rate of tax applicable to an employee is 6.2%. The rate is less because half (6.2%) of the tax is paid by employer and half is paid by employee (6.2%).

Tax rate for self employed person is 12.4%.

So now we can calculate tax of employee by multiplying his income with tax rate.

Social security tax= Income of first week x 6.2%

Social security tax = $1720 x 6.2%

Social security tax = $ 106.64           or          $ 107