The annual Medicare withholding for an executive earning $210,000 would be $3,045. This is determined by applying the 1.45% tax rate to the executive's total gross earnings, as Medicare taxes have no wage limit.
The annual Medicare withholding for an executive whose annual gross earnings are $210,000 would be calculated at 1.45% of the gross annual income. According to the information provided, there is no upper ceiling for Medicare taxes, meaning the entire amount is subject to the tax rate. Therefore:
Medicare withholding = Gross earnings × Medicare tax rate = $210,000 × 0.0145 = $3,045.
Even though the total Medicare tax rate is 2.9%, employees are responsible for paying half of this, which amounts to 1.45% of their earnings. Employers pay the other half, but as some economists suggest, this cost might indirectly affect the wages earned by employees.
The annual Medicare withholding for an executive with annual gross earnings of $210,000 is $3,045. This Step-by-step explanation is based on the 1.45% Medicare tax rate applied to the executive's entire earnings, as there is no wage ceiling for Medicare taxes.
Therefore, the Medicare contribution for an individual earnings $210,000 annually would be $3,045, without considering any additional surtaxes or other specific tax qualifications that may apply.