Employees in 2012 paid 4.2% of their gross wages towards social security (FICA tax), while employers paid another 6.2%. How much will someone earning $67,000 a year pay towards social security out of their gross wages?
To find out how much someone earning $67,000 a year will pay towards social security, we need to calculate 4.2% of their gross wages.
4.2/100 x 67000 = $2814
Therefore, someone earning $67,000 a year will pay $2814 towards social security out of their gross wages.
To calculate the amount someone earning $67,000 a year will pay towards social security out of their gross wages, you need to multiply their income by the employee social security tax rate.
First, let's calculate the employee social security tax contribution:
Employee social security tax contribution = Gross wages * Employee tax rate
Given that the employee tax rate is 4.2%, we can calculate:
Employee social security tax contribution = $67,000 * 4.2%
Converting the percentage to a decimal, we have:
Employee social security tax contribution = $67,000 * 0.042
Simplifying the calculation:
Employee social security tax contribution = $2,814
Therefore, someone earning $67,000 a year will pay $2,814 towards social security out of their gross wages.