Question 1206886

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.


<a href = "https://sfcontroller.org/sites/default/files/Documents/payroll/EmploymentTaxWage2016.pdf" target = "_blank">https://sfcontroller.org/sites/default/files/Documents/payroll/EmploymentTaxWage2016.pdf</a>


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.