Final answer:
An employer must withhold Social Security and Medicare tax from an employee's paycheck regardless of the employee's age, with both the employer and the employee each paying half of the 12.4% Social Security and 2.9% Medicare taxes, regardless of the employee being over 65, 70, or any other age.
Step-by-step explanation:
An employer must withhold Social Security (SS) and Medicare tax from an employee's paycheck regardless of the age of the employee. This means that whether an employee is 30 or 80, the same payroll tax obligations apply regarding SS and Medicare. The payroll taxes for Social Security are 12.4%, which is split between the employer and employee, with each paying 6.2%.
It's important to note that while the employee sees only their half of the contributions (6.2% for SS and 1.45% for Medicare) deducted from their paycheck, economists argue that the employer's share is indirectly passed on to employees through lower wages. Thus, employees bear the economic burden of the entire payroll tax.