Question

John and Jane, husband and wife, both are employed by XYZ Corporation. John earns $135,000 in salary in 2018, and Jane earns $70,000. How much FICA tax must they pay for 2018?

Please show work

Answer 1

FICA tax is paid at the rate of 15.3% of the salary.

it includes Social security @ 12.4% of salary. it will be paid by employee and employer in equal proportions i.e 6.2% each

it also includes Social Medicare @ 2.9% of salary. it will be paid by employee and employer in equal proportions i.e 1.45% each.

COMPUTATION

John earning salary of 135000

social security paid by john is 8370 i.e(135000 x 6.2%)

social security paid by Employer is 8370 i.e(135000 x 6.2%)

Medicare paid by john is 1957.5 i.e(135000 x 1.45%)

Medicare paid by Employer is 1957.5 i.e(135000 x 1.45%)

total paid by john is 10327.5

total paid by Employer is 10327.5

jane earning salary of 70000

social security paid by jane is 4340 i.e(70000 x 6.2%)

social security paid by Employer is 4340 i.e(70000 x 6.2%)

Medicare paid by jane is 1015 i.e(70000 x 1.45%)

Medicare paid by Employer is 1015 i.e(70000 x 1.45%)

total paid by jane is 5355

total paid by Employer is 5355.