An employee earning $65,000 annually works overtime and earns an additional $8,500 in overtime pay. What is the total FICA tax (Social Security and Medicare) that must be withheld from the employee's pay for the year?
Correct Answer
D) $5,623.75
Total wages = $65,000 + $8,500 = $73,500. FICA = 6.2% (Social Security) + 1.45% (Medicare) = 7.65%. Total FICA = $73,500 × 7.65% = $5,623.75.
Why This Is the Correct Answer
Total wages = $65,000 + $8,500 = $73,500. FICA = 6.2% (Social Security) + 1.45% (Medicare) = 7.65%. Total FICA = $73,500 × 7.65% = $5,623.75.
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