Question

Question 7 of 10

An employee's gross pay is $800. What is the employee's FICA withholding?
A. $121.60
B. $81.20
C. $100.60
OD. $61.20
SUBMIT

Answer 1

FICA stands for Federal Insurance Contributions Act and it is a federal law that requires employers to withhold and remit a certain percent of an employee’s earnings to help fund Social Security and Medicare. The total bill is split between the employer and employee, with each party paying half.

The FICA tax rate for Social Security is 6.2% on earnings up to $147,000 for 2022. The FICA tax rate for Medicare is 1.45% on all earnings.

To calculate the employee's FICA withholding, we need to add the Social Security tax and Medicare tax together.

For an employee with gross pay of $800, the Social Security tax would be $49.60 (6.2% of $800) and the Medicare tax would be $11.60 (1.45% of $800). Therefore, the employee's total FICA withholding would be $61.20 (Social Security tax + Medicare tax).

So the answer is OD ($61.20).

I hope that helps!

Answer 2

The FICA withholding rate is 7.65% (6.2% for Social Security and 1.45% for Medicare).

7.65% of $800 is:

0.0765 x $800 = $61.20

Therefore, the answer is option D, $61.20.