Question

An employee eamed $44,000 working for an employer in the current year. The current rate for Federal Insurance Contributions Act (FICA) Social Security is 6.2\% payable on earnings up to $137,700 maximum per year, and the rate for Federal insurance Contributions Act (FICA) Modicare 1.45\%. The employer's total Federal Insurance Contributions Act (FICA) payroll tax for this employee is: Multiple Choice $2,728.00 $3,366.00. $638.00. \$0, since the Federal Insurance Contributions Act (FICA) tax is only deducted from an employee's pay.

Answer 1

The total FICA payroll tax the employer must pay for an employee who earned $44,000 is $3,366.00, which includes both the employer's contributions to Social Security and Medicare.

Step-by-step explanation:

The Federal Insurance Contributions Act (FICA) includes two separate taxes: one for Social Security and another for Medicare. The Social Security tax is 12.4%, which is split equally between the employer and employee, making it 6.2% each. In this case, since the employee earned $44,000, the Social Security tax would be 0.062 * $44,000 = $2,728 for the employer's share. Medicare tax, fixed at 2.9%, is also split between the employer and the employee, with each paying 1.45%. Thus, for Medicare, it would be 0.0145 * $44,000 = $638.

Adding both the Social Security and Medicare contributions together: $2,728 (Social Security) + $638 (Medicare) = $3,366.00, which represents the total FICA payroll tax the employer must pay for this employee.