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Category: Tax
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# How to calculate FICA for 1) W2 employee who earned \$75K.

### Resolved Question:

How to calculate FICA for 1) W2 employee who earned \$75K. (is it 7.65% x \$75K?)and 2)Self employeed person who earned \$125K \$102K x 12.4% and \$125K x2.9%
Submitted: 5 years ago.
Category: Tax
Expert:  Merlo replied 5 years ago.
Hello silverfox,

Could you please clarify what tax year this pertains to? There are different income limits that the FICA applies to in any one tax year.

Customer: replied 5 years ago.
2008 tax year
Expert:  Merlo replied 5 years ago.
Hello again silverfox,

For the 2008 tax year, a maximum of \$102,000 is subject to social security taxes. There is no limit on the amount that medicare taxes apply to.

The FICA taxes for the year 2008 are 6.2% for social security tax and 1.45% for medicare tax. These taxes are paid by both the employee and the employer.

For an employee with a salary of \$75,000, his combined FICA taxes are \$5,737.50. (\$75,000 X 7.65%). The employer would make the same matching contribution.

When a person is self employed, they must pay both the employee and the employer share of these taxes. So the FICA tax for a self employed person is 12.4% for social security and 2.9% for medicare.

If a self employed person earns \$125,000, he pays social security tax only on the limit of \$102,000. So his SS tax is \$12,648.00 - (\$102,000 X 12.4%). He then also owes medicare tax on the entire income of \$125,000 for a total of \$3,625 (\$125,000 X 2.9%). His total FICA taxes are then \$16,273.00.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you.
Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience: 25+ years tax consulting. Specializing in returns for US citizens living abroad

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