Mike Samson is a college football coach making a base salary of $651,600 a year
ID: 2460081 • Letter: M
Question
Mike Samson is a college football coach making a base salary of $651,600 a year ($54,300 per month). Employers are required to withhold a 6.2% Social Security tax up to a maximum base amount and a 1.45% Medicare tax with no maximum. Assume Mike was employed throughout the year and the FICA base amount is $113,700.
Compute how much will be withheld during the year for Coach Samson’s Social Security and Medicare.
What additional amount will the employer need to contribute towards FICA taxes?
Mike Samson is a college football coach making a base salary of $651,600 a year ($54,300 per month). Employers are required to withhold a 6.2% Social Security tax up to a maximum base amount and a 1.45% Medicare tax with no maximum. Assume Mike was employed throughout the year and the FICA base amount is $113,700.
Explanation / Answer
Wage base applicable is 113700
Social security is subject to be taxed on wage base only. i.e 113700 x 6.2 %, = 7049.40
Medicare to be deducted = gross wage x 1.45 %,
651600 x 1.45 %, = 9448.20
total withheld = 7049.40 + 9448.20, = 16497.60
additional medicare amount required to be deduted is 0.9 % on wages exceeding 200000
amount exceeding = 651600 - 200000, = 451600
additional FICA contribution = 451600 x 0.9 %,= 4064.40