Question

Suppose you land a job with Google right out of college. Your economics training is very valuable to them, so you receive a starting annual salary of $65,000. What is the total amount of social insurance taxes you will be responsible for after your first year of work?a. $4,972.50b. $4,030.00c. $9,945.00d. $9,750.00e. $942.50

Answer 1

The total amount of social insurance taxes on a $65,000 salary is $4,972.50, which includes both Social Security tax ($4,030.00) and Medicare tax ($942.50).

Step-by-step explanation:

To calculate the total amount of social insurance taxes that you will be responsible for after your first year of work with an annual salary of $65,000, you need to consider both Social Security and Medicare contributions.

Social Security taxes are calculated as 6.2% of your gross annual income. On a $65,000 salary, the Social Security tax would be:

0.062 × $65,000 = $4,030.00

The Medicare tax rate is 1.45% of your gross annual income. So, for a $65,000 salary, the Medicare tax would be:

0.0145 × $65,000 = $942.50

To find the total amount of social insurance taxes, we just add the amounts for Social Security and Medicare taxes:

$4,030.00 (Social Security) + $942.50 (Medicare) = $4,972.50

Therefore, the total amount of social insurance taxes you will owe is $4,972.50, which makes the correct answer (a) $4,972.50.

Answer 2

B) $4,030.00

Step-by-step explanation:

Your total social insurance taxes represent 12.4% of your gross income. You are responsible for paying half of those taxes (6.2%) and your employer must pay the other half.

So you will have to pay $4,030 (= $65,000 x 6.2%) in social security taxes for your first year of work.