Multiple Choice
Which payroll function primarily involves determining the amount of compensation each employee should receive for a given pay period?
26
views
9. Current Liabilities
Payroll and Payroll Taxes
Struggling with Financial Accounting?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
An employee earns $3,000 in gross wages during a pay period. What amount of Medicare tax should be withheld from the employee's paycheck? (The Medicare tax rate is 1.45%.)
A
$43.50
B
$34.50
C
$45.00
D
$21.75
Verified step by step guidance1
Step 1: Understand the problem. The goal is to calculate the amount of Medicare tax to be withheld from the employee's paycheck based on the gross wages and the Medicare tax rate provided.
Step 2: Identify the formula for calculating Medicare tax. The formula is: Medicare Tax = Gross Wages × Medicare Tax Rate.
Step 3: Substitute the given values into the formula. The gross wages are $3,000, and the Medicare tax rate is 1.45%. Convert the percentage to a decimal by dividing by 100, so 1.45% becomes 0.0145.
Step 4: Perform the multiplication using the formula: Medicare Tax = $3,000 × 0.0145. This will give the amount of Medicare tax to be withheld.
Step 5: Compare the calculated Medicare tax amount to the provided answer choices to determine the correct answer.
Related Videos
Related Practice
Payroll and Payroll Taxes practice set
Problem sets built by lead tutorsExpert video explanations