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15 July, 12:04

Mayberry Ice Cream Shoppe has $1,500.00 in wages, $93.00 in Social Security withholding, $21.75 in Medicare withholding, $200.00 in federal income tax withholding, and $80.00 in state income tax withholding. The federal unemployment tax rate is 0.8%. In this scenario, what is the Medicare Tax Payable for the pay period?

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  1. 15 July, 12:27
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    Answer: The answer is $21.75

    Explanation:

    The rules says that employees will pay 1.45%, while the employers will pay 1.45% total is 2.9%

    The employers will calculate 1.45% of the wages as withholding tax and pay it to the tax authority.

    Therefore to calculate the Medicare tax payable for the pay period we use the formula

    Wages * Medicare tax rate

    Since wages = $1,500.00, Medicare tax rate = 1.45% (1.45:100 = 0.0145)

    1,500.00 * 0.0145

    = 21.75

    Therefore the Medicare tax payable for the pay period is $21.75
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