Question

to date jay ward has a cumulative earnings of $95,000. this week he is paid $3000. the total amount of social security tax for this week(assume a rate of 6.2% on 97,500 for social security and 1.45% for medicare).

Answer 1

$95,000 cumulative + $3000 current week = $98,000
Since the $98,000 is over the maximum social security limit of $97,500, you calculate the social security as follows:

Social Security: $97,500 - $95,000 = $2500
($2500)(0.062) = $1550 This is the social security tax

Medicare: ($3000)(0.0145) = $43.50 This is the medicare tax since there is no maximum limit