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30 November, 09:59

John is a High School principal. He earns $62,299.92 a year and is paid on a semimonthly basis. How much is deducted per pay period for Social Security? How much for Medicare?

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  1. 30 November, 10:14
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    Answer alongwith Step-by-step explanation:

    1. Social Security

    Here Gross income = $62,300

    Step 1 Find semiannual income

    Semimonthly gross income = $62,300 / 24 = $2595.83

    Step 2 Find the social security liability using social security rate and annual income

    Social security rate is 6.2%

    Social Security Liability = 6.2% x $2595.83 = $160.94 semimonthly payments

    Step 3 Find the social security liability using social security rate and annual income

    Deduction amount for Social security on monthly basis = $160.94 * 2 =

    $321.88 per month

    2. Medicare

    Here Gross income = $62,300

    Step 1 Find semiannual income

    Semiannual Gross income = $62,300 / 24 = $2595.83

    Step 2 Find the social security liability using Medicare rate and annual income

    Medicare rate is 1.45%

    Medicare Liability = 1.45% x $2595.83 = $37.64 semimonthly payments

    Step 3 Find the social security liability using Medicare rate and annual income

    Deduction amount for Social security on monthly basis = $160.94 * 2

    = $75.28 per month
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