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Brief Exercise 8-5 Calculate FICA taxes (L08-3) Mike Samson is a college football coach making a base salary of $638,400 a year ($53,200 per month)
Brief Exercise 8-5 Calculate FICA taxes (L08-3)
Mike Samson is a college football coach making a base salary of $638,400 a year ($53,200 per month). Employers are required to withhold a 6.2% Social Security tax up to a maximum base amount and a 1.45% Medicare tax with no maximum. Assuming the FICA base amount is $128,400.
1. Compute how much will be withheld during the year for Coach Samson's Social Security and Medicare. (Round your final answers to 2 decimal places.)
Social security Medicare I° $ 1.451
2. What matching amount will the employer need to contribute? (Round your final answer to 2 decimal places.)
$ 17,217.60
Expert Solution
1) Computation of Amount to be Withheld during the Year for Coach Samson's Social Security and Medicare:
Social Security Tax Withheld ($128,400*6.2%) = $7,960.80
Medicare Tax Withheld ($638,400*1.45%) = $9,256.80
Total Amount to be Withheld ($7,960.80+$9,256.80) = $17,217.60
2) Computation of Employer's Contribution:
The employer is liable to match the amount withheld from the employee's salary. Therefore, the employer will also contribute the same amount as withheld from M's salary.
So, Employer's Contribution = $17,217.60
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