he amount of money withheld from the annual gross earnings is the product of the gross earnings and the tax rate expressed as a decimal. Even though the executive has annual gross earnings of $$132,500,$ social security will only be taxed on a maximum of $$128,400.$ The tax rate for social security is $6\mathrm{.}2\%.$

Find the amount of money withheld due to social security.

social security withholdings$=$earnings subject to tax $$ tax rate$=128400$

$128,400$

$0\mathrm{.}062=$$$7960\mathrm{.}8$

$7,960\mathrm{.}80$

Step $2$

Unlike social security withholdings, there is no wage limit for Medicare. That is$,$ the entire annual gross earnings will be used to calculate the amount of money withheld due to Medicare. The Medicare tax rate is given to be $1\mathrm{.}45\%.$

Find the amount of money withheld due to Medicare.

Medicare withholdings$=$gross earnings $$ tax rate$=0\mathrm{.}0145=$$