Question

This year, Rocket Roofing Company paid $815,600 in gross wages. All of the gross wages were subject to 7.65% social security tax. What was the total social security taxpaid by the employees and employer for the year?$120,237.96$124,786.80$128,537.44$130,123.60None of these choices are correct.

Answer 1

To determine the amount of social security tax was paid we need to calculate how much is 7.65% of $815,600. For that we will convert the percentage to a fraction and multiply it by the total amount of gross wages. This is done below:

`\begin{gathered} \text{ social security tax=815600}\cdot7.65\text{ \%} \\ \text{ social security tax=815600}\cdot(7.65)/(100)=815600\cdot0.0765=62393.4 \end{gathered}`

Since the tax was paid by the employees and employer we need to multiply it by 2.

`\text{total security tax = 62393.4}\cdot2=124786.8`

The total amount paid was $124786.80.