In: Accounting
What percentage of the FICA payroll tax do workers who are not self-employed pay? For someone who earned $50,000 in 2019, how much did that person pay in FICA taxes? For someone who earned $200,000 in 2019, how much did that person pay in FICA taxes?
The tax rate for 2019 for social security is 6.2% for the employer and 6.2% for the employee, or 12.4% total. The rate for Medicare is 1.45% for the employer and 1.45% for the employee, or 2.9% total. And the earning limit for social security tax is 132900 as on 2019. And there is no cap for medicare .
Tax for employee for $ 50000
Social security = $ 50000 × 12.4% = $ 6200
Medicare = $ 50000 × 2.9% = $ 1450
Total = 6200 + 1450 = $ 7650
Employee's half = $ 7650 × 0.5 = $ 3825
Tax for employee for $ 200000
Social security = $ 132900 × 12.4% = $ 16480
(since the earning limit of social security is 132900, we can calculate tax for maximum amount of $ 132900)
Medicare = $ 200000 × 2.9% = $ 5800
(There is no limit in earnings for medicare)
Total = 16480 + 5800 = $ 22280
Employee's half = $ 22280 × 0.5 = $ 11140