Answer: In the United States, the Social Security tax rate for employees is currently 6.2% on income up to a certain limit, which changes annually. For the year 2021, the Social Security tax is withheld on income up to $142,800.
To find out how much is withheld from Spencer's paychecks each year for Social Security, we can use the following formula:
Social Security withholding = (Social Security tax rate) x (income subject to Social Security tax)
In this case, the income subject to Social Security tax is Spencer's annual salary of $37,200, since this is below the limit of $142,800. Therefore:
Social Security withholding = 0.062 x $37,200
Social Security withholding = $2,307.60
So Spencer's employer would withhold approximately $2,307.60 from his paychecks each year for Social Security.