To date, Jay Ward has xumulative earnings of $ 107,600. This week he is paid $3,000. What is the total amount of Social Security tax for this week? Assume a rate of 6.2% on $110,100 for Social Security and 1.45% for Medicare.
Amount paid this week = $3,000
Social security tax = 6.2%
6.2% = 0.062
$3,000 x 0.062 = $186.00
The total amount of social security tax for this week $186.00
18600
To calculate the total amount of Social Security tax for this week, we'll need to calculate the Social Security tax and the Medicare tax separately.
Step 1: Calculate the Social Security tax:
- The Social Security tax rate is 6.2% on a maximum taxable earnings of $110,100.
- First, we need to find out how much of Jay's earnings fall within the maximum taxable limit.
- Subtract $110,100 from Jay's cumulative earnings to find out the remaining earnings that are subject to Social Security tax: $107,600 - $110,100 = -$2,500 (negative amount indicates that all earnings fall within the maximum taxable limit).
- Multiply the remaining earnings by the Social Security tax rate: -$2,500 * 6.2% = -$155 (negative amount indicates no Social Security tax owed for this week).
Step 2: Calculate the Medicare tax:
- The Medicare tax rate is 1.45% on all earnings.
- Multiply Jay's earnings this week by the Medicare tax rate: $3,000 * 1.45% = $43.50.
Step 3: Calculate the total Social Security tax for this week:
- The total Social Security tax is the sum of the Social Security tax and the Medicare tax: $0 (Social Security tax) + $43.50 (Medicare tax) = $43.50.
Therefore, the total amount of Social Security tax for this week is $43.50.
To find the total amount of Social Security tax for this week for Jay Ward, we'll need to calculate the Social Security tax based on his earnings.
Step 1: Calculate the Social Security tax
The Social Security tax rate is 6.2% on earnings up to $110,100. Since Jay Ward's cumulative earnings to date is $107,600, we first need to determine how much more he can earn before reaching the maximum taxable limit.
Maximum taxable limit - Cumulative earnings to date = Remaining taxable earnings
$110,100 - $107,600 = $2,500
Step 2: Calculate the Social Security tax for this week
Now that we have the remaining taxable earnings ($2,500) and the tax rate (6.2%), we can calculate the Social Security tax for this week.
Social Security tax = Remaining taxable earnings * Social Security tax rate
Social Security tax = $2,500 * 0.062
Step 3: Calculate the Medicare tax
The Medicare tax rate is 1.45% on all earnings, with no maximum limit. Therefore, we can calculate the Medicare tax directly on his earnings for this week.
Medicare tax = Earnings for this week * Medicare tax rate
Medicare tax = $3,000 * 0.0145
Step 4: Calculate the total amount of Social Security tax for this week
To find the total amount of Social Security tax for this week, we add the Social Security tax and the Medicare tax.
Total Social Security tax for this week = Social Security tax + Medicare tax
Total Social Security tax for this week = (Social Security tax) + (Medicare tax)