What would be the total Medicare and Social Security taxes the employer should withhold on the last week of the year for an employee who earns $3,000 per week and has worked for the employer the entire year?

What would be the total Medicare and Social Security taxes the employer should withhold on the last week of the year for an employee who earns $3,000 per week and has worked for the employer the entire year?

• A. $43.50
• B. $229.50
• C. $765.00
• D. $1,530.00

Answer: (A)

The amount is based on FICA taxes: Social Security at 6.2% plus Medicare at 1.45% of the wages for that week. For a weekly pay of 3,000, the Social Security portion is 3,000 × 0.062 = 186, and the Medicare portion is 3,000 × 0.0145 = 43.50. Adding these gives a total of 186 + 43.50 = 229.50 withheld that week. The Social Security wage base would only cap this if annual earnings exceeded the cap; here, annual earnings would be 3,000 × 52 = 156,000, which is below typical Social Security caps, so the full 6.2% applies. Medicare has no cap, so its 1.45% applies as well. Hence the total withheld for that week is 229.50.

The amount is based on FICA taxes: Social Security at 6.2% plus Medicare at 1.45% of the wages for that week. For a weekly pay of 3,000, the Social Security portion is 3,000 × 0.062 = 186, and the Medicare portion is 3,000 × 0.0145 = 43.50. Adding these gives a total of 186 + 43.50 = 229.50 withheld that week.

The Social Security wage base would only cap this if annual earnings exceeded the cap; here, annual earnings would be 3,000 × 52 = 156,000, which is below typical Social Security caps, so the full 6.2% applies. Medicare has no cap, so its 1.45% applies as well. Hence the total withheld for that week is 229.50.