Final answer:
For the tax year 2022, employers must withhold 6.2% for Social Security and 1.45% for Medicare from an employee's gross pay. The total taxes, including both the employer and employee shares, are 12.4% for Social Security and 2.9% for Medicare.
Step-by-step explanation:
For the tax year 2022, the amounts employers are required to withhold from an employee's gross pay for Social Security tax and Medicare tax are as follows: Social Security tax is 6.2% of the gross annual income while Medicare tax is 1.45% of the gross annual income. The correct answer to the question is A) Social Security: 6.2%, Medicare: 1.45%. It's important to note, though, that both of these taxes are split between the employer and the employee, each paying half. For Social Security, the total tax is 12.4%, but an employee only sees 6.2% deducted from their paycheck, with the employer contributing the other half. Similarly, for Medicare, the total tax is 2.9%, with the employee again paying 1.45% and the employer matching this amount.
If you are a member of the "gig economy" and receive a 1099 tax statement, then you are considered an independent contractor. Therefore, you must pay both the employee and employer side of the payroll tax, totaling 12.4% for Social Security and 2.9% for Medicare, on your own without employer contribution.