A person earning $200,000 a year pays a little over _____ in payroll taxes.

A) $6,000
B) $9,500
C) $12,000
D) $15,000

Question

A person earning $200,000 a year pays a little over _____ in payroll taxes.A) $6,000B) $9,500C) $12,000D) $15,000

Parker Cahill · Accepted Answer

Final Answer : B, Explanation :  Payroll taxes consist of Social Security and Medicare contributions. For individuals earning over $200,000 a year, the Social Security contribution is only taken on the first $137,700 of their income. Therefore, the Social Security contribution for this individual would be 6.2% of $137,700, which is $8,537.40. The Medicare contribution is 1.45% on all earnings, so the Medicare contribution for this individual would be $2,900. Adding the two together, the total payroll taxes this person would pay is $11,437.40, which is a little over $9,500. Therefore, the correct choice is B, $9,500.

A person earning $200,000 a year pays a little over _____ in payroll taxes.

A) $6,000
B) $9,500
C) $12,000
D) $15,000

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