Multiple Choice
Which of the following is a type of federal payroll tax?
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9. Current Liabilities
Payroll and Payroll Taxes
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What is the FICA tax (assuming a 7.65% rate) on a weekly paycheck of $407.00?
A
$31.16
B
$28.12
C
$24.80
D
$35.45
Verified step by step guidance1
Understand that FICA tax includes Social Security and Medicare taxes, which are calculated as a percentage of an employee's gross earnings. The given rate is 7.65%.
Identify the gross earnings for the weekly paycheck, which is $407.00.
To calculate the FICA tax, multiply the gross earnings by the FICA tax rate. Use the formula: . Substitute the values: .
Perform the multiplication to determine the FICA tax amount. Ensure accuracy by using proper rounding rules if necessary.
Compare the calculated FICA tax amount to the provided answer choices to identify the correct option.
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