Question

Solve the problem using 6.2%, up to $128,400 for Social Security tax Calculate the monthly Social Security withholdings (in $) for the employee as the payroll manager for a cargo and freight company. (Round your answers to the nearest cent.)Year-to-Date Earnings: $147,000, Current Month:$14,750

Answer 1

To calculate the monthly Social Security withholdings for the employee, multiply the taxable amount by the tax rate of 6.2%.

Step-by-step explanation:

To calculate the Social Security withholdings for the employee, we need to determine the taxable amount.

The taxable amount is the lesser of the employee's current month earnings or the maximum taxable earnings, which is $128,400 in this case.

Next, we calculate the Social Security tax by multiplying the taxable amount by the tax rate of 6.2%.

In this case, the taxable amount is $14,750.

So, the Social Security tax for the current month would be $14,750 * 6.2% = $914.50.

Therefore, the monthly Social Security withholdings for the employee would be $914.50.