BUSINESS ADMINISTRATION
BUSINESS MATHEMATICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Ray Jackson’s gross biweekly pay is $3, 120. His earnings to date for the year total $78, 400. What amount is deducted from his pay for Social Security, which is taxed at 6.2%? For Medicare, which is taxed at 1.45%?
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$72.00, $56.78
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$193.44, $45.24
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$45.00, $54.60
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$198.00, $45.00
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Explanation:
Detailed explanation-1: -Employers and employees split the tax. For both of them, the current Social Security and Medicare tax rates are 6.2% and 1.45%, respectively. So each party – employee and employer – pays 7.65% of their income, for a total FICA contribution of 15.3%.
Detailed explanation-2: -It stands for the Federal Insurance Contributions Act and is deducted from each paycheck. Your nine-digit number helps Social Security accurately record your covered wages or self-employment. As you work and pay FICA taxes, you earn credits for Social Security benefits.
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