What is the employee's yearly contribution to the U.S. Social Security tax on a salary of [tex]$\$100,000[tex]$[/tex]?

\begin{tabular}{|c|c|c|}
\hline \multicolumn{3}{|c|}{ FICA Taxes } \\
\hline & Social Security & Medicare \\
\hline \multicolumn{1}{|c|}{ 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} & $[/tex]6.20\%[tex]$ & $[/tex]1.45\%$ \\
\hline
\end{tabular}

[tex]\$[?][/tex]



Answer :

To determine the employee's yearly contribution to the U.S. Social Security tax on a salary of [tex]$100,000, follow these steps: 1. Identify the Social Security tax rate for the employee: According to the given table, the employee is responsible for a Social Security tax rate of 6.20%. 2. Convert the percentage to a decimal: To make calculations easier, convert the percentage into a decimal. A percentage of 6.20% is equivalent to 0.0620 in decimal form. 3. Calculate the contribution amount: Multiply the employee's salary by the Social Security tax rate in decimal form: \( \text{Social Security Contribution} = \text{Salary} \times \text{Tax Rate} \) Using the given values: \[ \text{Social Security Contribution} = \$[/tex]100,000 \times 0.0620
\]

4. Compute the result:
Performing the multiplication gives:
[tex]\[ \text{Social Security Contribution} = \$100,000 \times 0.0620 = \$6200.00 \][/tex]

Therefore, the employee's yearly contribution to the U.S. Social Security tax on a salary of [tex]$100,000 is $[/tex]6200.00.