What is the employer's yearly contribution to the U.S. Medicare tax on a salary of [tex]\$65,000[/tex]?

\begin{tabular}{|c|c|c|}
\hline
\multicolumn{3}{|c|}{FICA Taxes} \\
\hline
& Social Security & Medicare \\
\hline
Total Due: & [tex]12.40\%[/tex] & [tex]2.90\%[/tex] \\
\hline
\begin{tabular}{l}
Employer's \\
Responsibility
\end{tabular} & [tex]6.20\%[/tex] & [tex]1.45\%[/tex] \\
\hline
\begin{tabular}{l}
Employee's \\
Responsibility
\end{tabular} & [tex]6.20\%[/tex] & [tex]1.45\%[/tex] \\
\hline
\end{tabular}



Answer :

To determine the employer's yearly contribution to the U.S. Medicare tax on a salary of [tex]$65,000, follow these steps: 1. Identify the Medicare tax rate for the employer: According to the table, the employer's responsibility for the Medicare tax is 1.45%. 2. Convert the percentage to a decimal: The Medicare tax rate of 1.45% needs to be converted to a decimal for calculation purposes. To do this, divide 1.45 by 100: \[ 1.45\% = \frac{1.45}{100} = 0.0145 \] 3. Calculate the employer's contribution based on the salary: Multiply the salary by the decimal form of the Medicare tax rate: \[ \text{Employer's Medicare Contribution} = \$[/tex]65,000 \times 0.0145
\]

4. Calculate the product:
[tex]\[ \$65,000 \times 0.0145 = \$942.5 \][/tex]

Therefore, the employer's yearly contribution to the U.S. Medicare tax on a salary of [tex]$65,000 is \$[/tex]942.50.