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An employee earned $43,300 working for an employer in the current year. The current rate for FICA Social Security is 6.2% payable on earnings up to $118,500 maximum per year and the rate for FICA Medicare 1.45%. The employer's total FICA payroll tax for this employee is:\

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Answer:

$3,313

Explanation:

Both employees and employers pay FICA taxes in the same proportion. The employer's share of FICA taxes is:

  • 6.2% Social Security tax x $43,300 (total salary) = $2,684.60 ≈ $2,685*
  • 1.45% Medicare tax x $43,300 (total salary) = $627.85 ≈ $628*
  • total Federal Insurance Contributions Act (FICA) taxes = $3,313

The employee will also pay $3,313 in FICA taxes.

*Taxes are always rounded to the nearest dollar since tax filings are made without cents.

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