An employee earns $52,000 annually. Calculate the total FICA taxes (Social Security and Medicare) the employer must pay for this employee in 2024.
Correct Answer
D) $3,978
FICA taxes include Social Security (6.2%) and Medicare (1.45%) for a total of 7.65%. $52,000 × 0.0765 = $3,978. The employer pays this amount in addition to the employee's contribution.
Why This Is the Correct Answer
The correct answer is B ($3,978) because FICA taxes consist of Social Security tax at 6.2% and Medicare tax at 1.45%, totaling 7.65%. When multiplied by the annual salary of $52,000, this gives $3,978. This represents the employer's portion of FICA taxes, which matches the employee's contribution for a total FICA burden of $7,956.
Why the Other Options Are Wrong
Option A: $4,238
Option A ($3,458) is incorrect because it appears to use an incomplete FICA rate, possibly calculating only a portion of the required Social Security and Medicare taxes.
Option C: $4,498
Option D ($4,498) is incorrect because it significantly exceeds the 7.65% FICA calculation, likely including other payroll taxes that are not part of FICA.
Memory Technique
Remember 'FICA 765' - FICA rate is 7.65% (Social Security 6.2% + Medicare 1.45%). Think 'Seven-Sixty-Five keeps FICA alive!'
Reference Hint
Look up payroll tax calculations and FICA rates in the Business and Finance chapter, specifically the section on employer tax obligations and payroll responsibilities.
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