how to find deductions

Question

The Federal Insurance Contributions Act (FICA) requires that your employer deduct a total of 7.65 percent from your paycheck for Social Security and Medicare tax purposes. A Social Security rate of 6.2 percent is deducted on the first $90,000 you earn. A Medicare rate of 1.45 percent is deducted from all your earnings.

Michaela Jordan is a tax lawyer who earns $132,000 per year and

is paid at the end of every month. What is the combined amount withheld from her September paycheck for Social Security and Medicare?

Answer 1

6.20% deduction on the first 90000 (1)

1.45 % deduction from all earnings (2)

Employer pays equal amount (1) + (2)

Annual Salary = 132000 = Per Monthly salary = 132000/12 = 11000

By the end of September. todal earnings are 11000*9 = 99000

6.2% will be deducted on first 90,000

Up to the 8th month 6.2% * 11000 9th Month 2000 * 6.2% = 124 (1)

1.45% from all earrnings = 11000*1.45% = 159.50 (2)

Add up (1) & (2)

124 + 159.50 = 283.50

The employer matches that so = Add to it $283.50

Total $567.00