Question

Which of the following deductions must be matched by the employer, resulting in both a deduction from gross pay and an expense to the employer?

- Federal income taxes
- Federal unemployment taxes
- FICA taxes
- Charitable deductions

Answer 1

FICA taxes are the deductions that must be matched by the employer, including Social Security and Medicare contributions. Other deductions such as federal income taxes and charitable deductions are not employer-matched.

Step-by-step explanation:

The deductions from an employee's gross pay that must be matched by the employer, which results in both a deduction from gross pay and an expense to the employer, are FICA taxes. FICA stands for the Federal Insurance Contributions Act, which includes Social Security and Medicare taxes.

Specifically, the Social Security deduction is 6.2% of the gross income and Medicare is 1.45%, both of which are matched by the employer. Federal income taxes and charitable deductions, on the other hand, are solely the responsibility of the employee and are not matched by the employer.

Federal unemployment taxes are also an employer expense, but are not deducted from the employee's gross pay.