Question

find the social security tax and the medicare tax paid by jeff fosia for the current pay period. assume all jeffs earnings are subject to both taxes and that the fica rate is 6.2% and the medicare rate is 1.45%.
employee | earnings current pay period | fica @ 6.2% | medicare @ 1.45%
fosia, j. | $504.38 | |

what is the fica tax deducted from jeffs current gross earnings?
$ (round to the nearest cent.)
the medicare deduction from jeffs current gross earnings is $ .
(round to the nearest cent.)

Explanation:

Step1: Calculate FICA tax

To find the FICA tax, we multiply the current pay period earnings by the FICA rate (6.2% or 0.062 in decimal form).
The formula is: \( \text{FICA Tax} = \text{Earnings} \times \text{FICA Rate} \)
Given earnings = $504.38 and FICA rate = 0.062, so:
\( 504.38 \times 0.062 \)

Step2: Compute the product

\( 504.38 \times 0.062 = 31.27156 \)

Step3: Round to nearest cent

Rounding 31.27156 to the nearest cent gives $31.27.

Step4: Calculate Medicare tax

To find the Medicare tax, we multiply the current pay period earnings by the Medicare rate (1.45% or 0.0145 in decimal form).
The formula is: \( \text{Medicare Tax} = \text{Earnings} \times \text{Medicare Rate} \)
Given earnings = $504.38 and Medicare rate = 0.0145, so:
\( 504.38 \times 0.0145 \)

Step5: Compute the product

\( 504.38 \times 0.0145 = 7.31351 \)

Step6: Round to nearest cent

Rounding 7.31351 to the nearest cent gives $7.31.

Answer:

FICA tax deducted: $31.27
Medicare deduction: $7.31