Question

Baker is single and earned $225,100 of salary as an employee in 2020. How much should his employer have withheld from his paycheck for FICA taxes? (Round your answer to the nearest whole dollar amount.)

$12,027

$11,800

$10,562

$17,215

Answer 1

(Q) Baker is single and earned $225,100 of salary as an employee in 2020. How much should his employer have withheld from his paycheck for FICA taxes?

(Ans) The correct answer is option B - $11800

• The FICA ( Federal Insurance Contributions Act) tax also known as Payroll Tax is your contribution to Social Security and Medicare as a percentage of your salary.

          Calculation of employer's contribution to be withheld for FICA Taxes

• For the year 2020, the Social Security contribution is 6.2% on your first $137,700 of wages and Medicare conrtributions is 1.45% on all your wages.

                = ($137700 x 0.062) + ($225100 x 0.0145)

                = $11801.35 rounded to $11800