Question

Employers are required to pay all of the following on the wages paid to each employee except:

Multiple Choice

• Medicare taxes.

• Worker's compensation insurance.

• Pension plan benefits.

• Social security taxes.

Answer 1

Pension or retirement plans offer the dual benefit of investment and insurance cover. By investing a certain amount regularly towards your pension plan, you will accumulate a considerable sum in a phase-by-phase manner. This will ensure a steady flow of funds once you retire. Public Provident Fund is one of the most popular retirement planning schemes in India.

When you start contributing to your retirement early, the funds build a secure golden year money-wise over the years. A well-chosen retirement plan can help you rise above inflation, thanks to the power of compounding.

The employee's share of the Medicare tax is a percentage withheld from his or her income. For example, in 2020, the Medicare tax was 1.45% on the first $200,000 of wages ($250,000 for joint returns and $125,000 for married taxpayers filing a separate return). Employers also pay 1.45%. There's also a 0.9% Additional Medicare Tax that only the employee pays for wages that exceed $200,000 (still $250,000 for joint returns and $125,000 for married taxpayers filing a separate return).

The Social Security tax is applied to income earned by employees and self-employed taxpayers. Employers usually withhold this tax from employees’ paychecks and forward it to the government. The funds collected from employees for Social Security are not put into a trust for the individual employee currently paying into the fund, but rather are used to pay existing retirees in a "pay-as-you-go" system.

Ans:worker compensation insurence