Question

Michael Miller is paid twice a month and had total gross earnings as of 10/15 of $116,800. His gross earnings for the period ending 10/31 were $6,000. If social security taxes are 6.2% on a maximum earnings of $122,700 per year and Medicare tax is 1.45% on all earnings, how much medicare tax will be paid by Michael and how much will be paid by his employer for the period ending 10/31?

Answer 1

Answer:

Medicare tax to be paid by Michael =$0

Medicare tax to be paid by the employer = $1780.6

Step-by-step explanation:

Total gross earnings as of 10/15 = $116800

Gross earnings for the period ending 10/31 = $6000

Since Michael Miller is paid twice a month, the gross earnings for the period ending 10/15 = $6000

Gross earnings for the month of October = 6000+6000

                                                                              = $12000

Total gross earnings as of 10/31 = 116800 + 6000

                                                     = $122800

Security tax rate = 6.25%

So, security tax to be paid by Michael = 6.25% of 122800

= $\frac{6.25}{100}$*122800

= 0.0625*122800

= $7675

Earnings of Michael after deducting the security tax= 122800 - 7675

= $115125

The medicare tax rate will be 1.45% on $122,700 earning or more.

As Michael's earning after the payment of security tax is $115125, so Michael does not need to pay any medicare tax.

So,  Medicare tax to be paid by Michael =$0

Medicare tax to be paid by the employer = 1.45% of 122,800

= $\frac{1.45}{100}$*122800

= 0.0145*122800

= $1780.6