Question

Employees in 2012 paid 4.2% of their gross wages towards social security (FICA tax), while employers paid another 6.2%. How much will someone earning $39,000 a year pay towards social security out of their gross wages? Give your answer accurate to at least the nearest dollar.

Answer 1

An individual earning $39,000 a year would pay $2,418 towards Social Security, calculated by multiplying the gross income by the standard Social Security tax rate of 6.2%.

Step-by-step explanation:

The question asks to calculate the amount an individual earning $39,000 a year would pay towards Social Security out of their gross wages, based on the 2012 Social Security (FICA) tax rate for employees, which was 4.2%. However, it's important to note that the standard rate both before and after 2012 is 6.2% for Social Security. For the purpose of this calculation, we will use the standard rate of 6.2%.

To find out how much is paid towards Social Security, one would calculate 6.2% of the individual's gross annual income of $39,000. The calculation is as follows:

• Social Security tax = Gross annual income × Social Security tax rate
• Social Security tax = $39,000 × 0.062
• Social Security tax = $2,418

Therefore, someone earning $39,000 a year would have $2,418 deducted from their gross wages for Social Security taxes.