Check My Work

If the year$-$to$-$date earnings $$$$128,400,$ then all of the Current Gross Pay is subject to the Social Security tax.

If Cumulative Pay Before Current Gross Pay $>$$$128,400$ then none of the current earnings are subject to Social Security Tax.

If Year$-$to$-$Date Earnings partially extend beyond the OASDI cap $($$$128,400),$ then a portion of the Current Gross Pay is subject to Social Security Tax.

For example, assume that Cumulative Pay Before Current Weekly Payroll is $$126,125$ and that current gross pay is $$6,000.$ Year$-$to$-$date earnings would be

$$132,125($$$126,125+$$$6,000).$

The amount over the social security maximum would be $$3,725($$$132,125-$$$128,400).$

The amount amount subject to Social Security tax is difference between the OASDI cap $($$$128,400)$ and Cumulative Pay Before Current Weekly Payroll of

$$126,125,$ or $$2,{275}^a.$

Thus the amount Subject to Soc. Sec. is $$2,275,$ taxed at the OASDI rate of $6\mathrm{.}2\%$ which equals $$141\mathrm{.}05$

${?}^a$ Note: Your check figure is $$3,725+$$$2,275=$$$6,000.$Calculating Social Security and Medicare Taxes

Assume a Social Security tax rate of $6\mathrm{.}2\%$ is applied to maximum earnings of $$128,400$ and a Medicare tax rate of $1\mathrm{.}45\%$ is applied to all earnings. Calculate the Social

Security and Medicare taxes for the following situations:

If required, round your answers to the nearest cent.