An employee earned $4,800 working for an employer in the current year. The curre

Question

An employee earned $4,800 working for an employer in the current year. The current rate for FICA Social Security is 6.2% payable on earnings up to $117,000 maximum per year and the rate for FICA Medicare 1.45%. The employer's total FICA payroll tax for this employee is:

A.) Zero, since the FICA tax is a deduction from an employee's pay, and not an employer tax.

B.) $734.40.

C.) $297.60.

D.) $69.60.

E.) $367.20.

An employee earned $4,800 working for an employer in the current year. The current rate for FICA Social Security is 6.2% payable on earnings up to $117,000 maximum per year and the rate for FICA Medicare 1.45%. The employer's total FICA payroll tax for this employee is:

Explanation / Answer

Each employee must pay FICA taxes. In addition, employers must match each
employee’s FICA contribution. The matching contribution results in payroll tax
expense to the employer. The employer’s tax is subject to the same rate and
maximum earnings as the employee’s. The company uses the same account, FICA
Taxes Payable, to record both the employee’s and the employer’s FICA contributions.

Therefor Total FICA Taxes Payable=4800*7.65/100=367.2.

Answer is E

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