Table of contents

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1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

9. Current Liabilities

Payroll and Payroll Taxes

Financial Accounting

9. Current Liabilities

Payroll and Payroll Taxes

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Multiple Choice

What percentage of their wages does an employee pay for FICA (Federal Insurance Contributions Act) taxes?

7.65%

2.9%

1.4%

15.30%

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Verified step by step guidance

Understand that FICA taxes consist of two components: Social Security tax and Medicare tax. Social Security tax is 6.2% of wages, and Medicare tax is 1.45% of wages.

Add the percentages of Social Security tax (6.2%) and Medicare tax (1.45%) to determine the total percentage of wages paid by the employee for FICA taxes.

Express the calculation as a formula: Total FICA percentage = Social Security tax percentage + Medicare tax percentage.

Substitute the values into the formula: Total FICA percentage = 6.2% + 1.45%.

Verify that the total FICA percentage matches one of the provided answer choices.