**Lesson 2.4: Social Security & Medicare**The Federal Insurance Contributions Act (FICA) requires employers to deduct 6.2% for Social Security and 1.45% of all annual income for Medicare taxes.1. **Lorenzo Lopez**, a store manager, has a gross weekly income of $721.15. His earnings to date for this year total $25,240.25. How much is deducted from his paycheck this week for Social Security? How much for Medicare? - **Social Security:** __________ - **Medicare:** __________2. **Maria Metcalf**, a heating technician, has a gross weekly income of $502.16. Her earnings to date for this year are $20,086.40. How... (The text cuts off here) **Understanding FICA on Your Payroll Statement**The **Federal Insurance Contributions Act (FICA)** mandates that employers deduct a percentage of your income as taxes for **Social Security** to fund retirement and disability benefits.**On a payroll statement**, Social Security and Medicare are combined under one umbrella: FICA.- **Social Security Tax Withholding**: Calculated as **Gross Pay * 6.2%**. - Example: 6.2% is expressed as 0.062.- **Medicare Tax Withholding**: Calculated as **Gross Pay * 1.45%**. - Example: 1.45% is expressed as 0.0145.Thus, **FICA = Social Security Tax + Medicare Tax**.**Page 137 Concept Check:**1. Monthly Salary: $3,1002. Weekly Salary: $350

Given details are Gross weekly income for Lorenzo Lopez = $721.5

Answered: $721.15. His earnings to date for this…

$721.15. His earnings to date for this year total $25,240.25. How much is deducted from his paycheck this week for Social Security? How much for Medicare? SS Medicare

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

**Lesson 2.4: Social Security & Medicare**

The Federal Insurance Contributions Act (FICA) requires employers to deduct 6.2% for Social Security and 1.45% of all annual income for Medicare taxes.

1. **Lorenzo Lopez**, a store manager, has a gross weekly income of $721.15. His earnings to date for this year total $25,240.25. How much is deducted from his paycheck this week for Social Security? How much for Medicare?

- **Social Security:** __________
- **Medicare:** __________

2. **Maria Metcalf**, a heating technician, has a gross weekly income of $502.16. Her earnings to date for this year are $20,086.40. How... (The text cuts off here)

**Understanding FICA on Your Payroll Statement**

The **Federal Insurance Contributions Act (FICA)** mandates that employers deduct a percentage of your income as taxes for **Social Security** to fund retirement and disability benefits.

**On a payroll statement**, Social Security and Medicare are combined under one umbrella: FICA.

- **Social Security Tax Withholding**: Calculated as **Gross Pay * 6.2%**.
- Example: 6.2% is expressed as 0.062.

- **Medicare Tax Withholding**: Calculated as **Gross Pay * 1.45%**.
- Example: 1.45% is expressed as 0.0145.

Thus, **FICA = Social Security Tax + Medicare Tax**.

**Page 137 Concept Check:**

1. Monthly Salary: $3,100
2. Weekly Salary: $350

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