What will be the total deduction for social security and Medicare taxes on Mary's next weekly paycheck of $1,780 if she has already earned $32,040 this year? Social security tax is 6.2% of wages up to $106,800. Medicare tax is 1.45% of all wages.
(1780 * 0.062) + (1780 * 0.0145) = ?
To calculate the total deductions for social security and Medicare taxes on Mary's next weekly paycheck, you need to follow these steps:
Step 1: Determine the social security tax deduction
- The current social security tax rate is 6.2%.
- However, this rate applies only to wages up to a certain annual threshold.
- In this case, the threshold is $106,800.
- Find the amount Mary has earned so far this year ($32,040) and compare it to the threshold.
- Since Mary's year-to-date earnings are below the threshold, the full 6.2% rate applies.
- Calculate the social security tax deduction by multiplying Mary's paycheck amount ($1,780) by the social security tax rate (6.2%).
Social security tax deduction = $1,780 * 6.2% = $110.36
Step 2: Determine the Medicare tax deduction
- The Medicare tax rate is a flat 1.45% of all wages, without any income threshold.
- Calculate the Medicare tax deduction by multiplying Mary's paycheck amount ($1,780) by the Medicare tax rate (1.45%).
Medicare tax deduction = $1,780 * 1.45% = $25.81
Step 3: Calculate the total deduction
- Add the social security tax deduction ($110.36) and the Medicare tax deduction ($25.81).
Total deduction = $110.36 + $25.81 = $136.17
Therefore, the total deduction for social security and Medicare taxes on Mary's next weekly paycheck of $1,780 will be $136.17.