An Employee Earned $43,300 Working for an Employer in the Current

question 73

Multiple Choice

An employee earned $43,300 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 is 1.45%. The employer's total FICA payroll tax for this employee is:

• A)$8,950.50.
• B)$5,638.05.
• C)$3,312.45.
• D)$2,684.60.
• E)$0

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Definitions:

Posttax Distribution

The distribution of income or assets among various groups after accounting for the effects of taxation.

Transfer Distribution

The allocation or reallocation of income or wealth through mechanisms other than market transactions, such as taxation or welfare payments.

Noncash Transfer

A government transfer payment in the form of goods and services rather than money, for example, food stamps, housing assistance, and job training; also called in-kind transfers.