Final answer:
The correct calculation for the Social Security tax deduction from Rachel's annual salary of $105,000 is by multiplying by the annual Social Security tax rate of 6.2%. Her monthly Social Security tax deduction would then be $542.50.
Step-by-step explanation:
When calculating the amount of Social Security taxes that will be deducted from Rachel's salary in November, we need to apply the current Social Security tax rate to her gross annual income. The Social Security tax is a flat rate of 6.2% for employees on income earned up to a certain limit, which for 2021, was $142,800. Considering Rachel earns $105,000 per year, her annual income is below this threshold, so her entire salary is subject to the Social Security tax.
Therefore, the correct option to calculate Rachel's Social Security tax deduction for the month is Option 2: 'The Social Security tax deduction is $105,000 multiplied by the Social Security tax rate for November.' However, the term 'for November' is misleading because the Social Security tax rate is fixed throughout the year and does not vary from month to month. We will therefore disregard the 'for November' part and compute the deduction based on the annual rate.
The Social Security tax deduction from Rachel's monthly salary, if she is paid evenly throughout the year, would be calculated as:
$105,000 (annual salary) X 6.2% (Social Security tax rate) = $6,510 (annual deduction)
For the monthly deduction, divide the annual deduction by 12:
$6,510 / 12 = $542.50
Thus, Rachel will have $542.50 deducted from her salary in November for Social Security taxes.