Question

Bill earned a gross pay of $1,424.50 last week. Using the fact that social security tax is 6.2% of gross pay, and Medicare is 1.45% of gross pay, determine the amount of social security tax and how much in Medicare was deducted from Bill's gross pay?

a. Social Security: $88.27, Medicare: $20.65
b. Social Security: $88.27, Medicare: $10.45
c. Social Security: $100.00, Medicare: $20.65
d. Social Security: $100.00, Medicare: $10.45

Answer 1

To determine the amount of social security tax and Medicare deducted from Bill's gross pay, we can use the given percentages and apply them to the gross pay. Social Security tax is 6.2% of the gross pay, and Medicare tax is 1.45% of the gross pay.

Step-by-step explanation:

To determine the amount of social security tax and Medicare deducted from Bill's gross pay, we can use the given percentages and apply them to the gross pay.

Social Security tax is 6.2% of the gross pay, so we calculate it by multiplying the gross pay by 0.062. In this case, the social security tax is $1424.50 * 0.062 = $88.27.

Medicare tax is 1.45% of the gross pay, so we calculate it by multiplying the gross pay by 0.0145. In this case, the Medicare tax is $1424.50 * 0.0145 = $20.65.

Therefore, the amount of social security tax deducted from Bill's gross pay is $88.27, and the amount of Medicare deducted is $20.65. The correct answer is a. Social Security: $88.27, Medicare: $20.65.