Question 1206886: 2016 FICA Tax Rates1
Employee's Rates Matching Rates Paid by
the Employer Self-Employed Rates
7.65% on first $118,500 of income
1.45% on income above $118,500
7.65% on first $118,500 paid in wages
1.45% on wages above $118,500
13.3% on first $118,500 of net earnings
2.9% on earnings above $118,500
1FICA taxes include Social Security and Medicare. The Social Security tax applies to the first $118,500 of income, while the Medicare tax applies to all income.
Suppose Nina has $207,500 of income from work and is not self-employed. How much will Nina have to pay in FICA taxes?
Answer by Theo(13342)   (Show Source):
You can put this solution on YOUR website!
FICA taxes include Social Security and Medicare. The Social Security tax applies to the first $118,500 of income, while the Medicare tax applies to all income.
you're paying 6.2% for social security and 1.45% for medicare up to 118,500.
after that, you're paying 1.45% for medicare.
your problem works out to be this:
nina has 207,500 of income from work and she is not self-employed.
she will have to pay 7.65% on first 118,500 of income.
this take into account social security and medicare plus she will have to pay 1.45% on medicare for any income above 118,500.
that becomes .0765 * 118,500 + .0145 * 89,000 = 10,355.75.
you could also look at it as 6.2% for social security up to 118,500 plus 1.45% for medicare with no upper limit.
that becomes .062 * 118,500 + .0145 * 207,500 = 10,355.75.
10,355.75 is your solution.
i looked up 2016 fica on the internet this is what it says.
https://sfcontroller.org/sites/default/files/Documents/payroll/EmploymentTaxWage2016.pdf
you captured it correctly except for employer's rate which was 15.3% instead of 13.3% for employer tax rate for social security.
if you are self-employed, you pay the employee's part plus the employer's part.
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