Question

Mayberry Ice Cream Shoppe has $1,500.00 in wages, $93.00 in Social Security withholding, $21.75 in Medicare withholding, $200.00 in federal income tax withholding, and $80.00 in state income tax withholding. The federal unemployment tax rate is 0.8%. In this scenario, what is the Medicare Tax Payable for the pay period?

Answer 1

Answer: The answer is $21.75

Explanation:

The rules says that employees will pay 1.45%, while the employers will pay 1.45% total is 2.9%

The employers will calculate 1.45% of the wages as withholding tax and pay it to the tax authority.

Therefore to calculate the Medicare tax payable for the pay period we use the formula

Wages × Medicare tax rate

Since wages = $1,500.00, Medicare tax rate = 1.45% ( 1.45÷100 = 0.0145)

1,500.00 × 0.0145

= 21.75

Therefore the Medicare tax payable for the pay period is $21.75