Question

Calculate the Social Security and Medicare deductions for the following employee (assume a tax rate of 6.2% on $142,800 for Social Security and 1.45% for Medicare): pay amount this period is 9000

Answer 1

To calculate the Social Security deduction, multiply the pay amount by 6.2%. For Medicare deduction, multiply the pay amount by 1.45%.

Step-by-step explanation:

To calculate the Social Security and Medicare deductions for the employee, we need to use the given tax rates. The Social Security deduction is 6.2% and the Medicare deduction is 1.45%, both based on the gross annual income. In this case, the pay amount for this period is $9000.

To calculate the Social Security deduction, we multiply the pay amount by 6.2%: $9000 * 0.062 = $558.00.

To calculate the Medicare deduction, we multiply the pay amount by 1.45%: $9000 * 0.0145 = $130.50.