Question

Sally hires a maid to work in her home for $280 per month. The maid is 25 years old and not related to Sally. During 2019, the maid worked 9 months for Sally.Do not round immediate computations and round your final answers to two decimal places. a. What is the amount of Social Security tax Sally must pay as the maid's employer? b. What is the amount of Medicare tax Sally must pay as the maid's employer? c. What is the amount of Social Security and Medicare tax which must be withheld from the maid's wages? d. Sally should withhold for Social Security and Medicare tax of ___.

Answer 1

Step-by-step explanation:

Since we know that the current Social Security tax is 12.4% with employees and employers each paying 6.2%; and the Medicare tax rate is 2.9%. Employers and employees split that cost with each paying 1.45%

a. Social Security Tax

Wage per month = 280$

social security tax = ( wage per month x number of months worked) x tax rate

social security tax = ( 280 x 9 ) x 6.20%

social security tax = 156.24 $

b. Medicare Tax

Medicare tax = ( wage per month x number of months worked) x tax rate

Medicare tax = (280 x 9) x 1.45%

Medicare tax = 36.54$

c. Social security and medicare tax withheld

Social Security and Medicare tax = ( wage per month x number of months worked) x tax rate

Social Security and Medicare tax = (280 x 9) x (6.2 + 1.45)

Social Security and Medicare tax = (280 x 9) x 7.65

Social Security and Medicare tax = 192.78$

d. Sally should withhold for social security and medicare tax of 192.78$