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An employee earns $8,500 for the current period. The cumulative earnings of previous pay periods is...

An employee earns $8,500 for the current period. The cumulative earnings of previous pay periods is $100,900. Social security tax applies to the first $128,400 of employee earnings. Calculate the total and individual amounts to be withheld for social security (6.2%), Medicare (1.45%) and federal income tax (15%).

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Answer #1

Social Security Taxes = Earnings for Current Period X Social Security Tax Rate

Social Security Taxes = $8,500 X 6.2%

Social Security Taxes = $527

Social security taxes will be applicable as the total earnings have not crossed the threshold limit of $128,400.

Medicare Taxes = Earnings for Current Period X Medicare Tax Rate

Medicare Taxes = $8,500 X 1.45%

Medicare Taxes = $123.25

Federal Income Tax = Earnings for Current Period X Federal Income Tax Rate

Federal Income Taxes = $8,500 X 15%

Federal Income Taxes = $1,275

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