Question

Employees in 2012 paid 4.2% of their gross wages towards socialsecurity (FICA tax), while employers paid another 6.2%. Howmuch will someone earning $25,000 a year pay towards socialsecurity out of their gross wages?

Answer 1

The FICA tax paid is split as follows;

`\begin{gathered} \text{Employee}=4.2\% \\ \text{Employer}=6.2\% \end{gathered}`

All paid out of the employees gross wages.

For an employee who earns a total gross wage of $25,000, the tax payment would be calculated as follows;

`\begin{gathered} \text{Employee}=25000*4.2\% \\ \text{Employee}=25000*0.042 \\ \text{Employee}=1050 \end{gathered}`
`\begin{gathered} \text{Employer}=25000*6.2 \\ \text{Employer}=25000*0.062 \\ \text{Employer}=1550 \end{gathered}`

Total tax payment;

`\begin{gathered} \text{Total}=\text{Employee}+\text{Employer} \\ \text{Total}=1050+1550 \\ \text{Total}=2600 \end{gathered}`

ANSWER:

The total amount paid for someone who earns $25,000 a year would be $2,600.