When calculating FICA taxes for 2024, what is the total rate an employer must pay for Social Security and Medicare combined?
Correct Answer
B) 7.65%
The employer FICA rate is 7.65%, consisting of 6.2% for Social Security and 1.45% for Medicare. This matches the employee portion, making the total FICA burden 15.3% when including both employer and employee portions.
Why This Is the Correct Answer
The employer FICA rate is indeed 7.65% total for 2024. This consists of 6.2% for Social Security taxes and 1.45% for Medicare taxes that the employer must pay on behalf of each employee. This is the employer's portion only, which matches the employee's portion, creating a combined total burden of 15.3% when both portions are considered together.
Why the Other Options Are Wrong
Option C: 15.3%
15.3% represents the total FICA burden including both employer AND employee portions combined. The question asks specifically for the employer rate only, not the combined rate.
Option D: 6.2%
12.4% would be double the Social Security rate (6.2% x 2) but fails to include any Medicare taxes. This is not the correct employer FICA rate.
Memory Technique
Remember '7-6-5' for 7.65% employer FICA rate. Or think 'Social Security 6.2 + Medicare 1.45 = Lucky 7.65' since contractors need to know this rate to stay profitable.
Reference Hint
Look up payroll tax requirements in the Business and Finance chapter, specifically the section on employer tax obligations and FICA calculations.
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