The Christmas Cove Dyke of coastal Maine, USA, and regional sources ... by McHone, J. Gregory; Hussey, Arthur M., II; West, David P., Jr.; Bailey, David G. / Atlantic Geology.
Social security and Medicare taxes have different rates and only the social security tax has a wage base limit. The wage base limit is the maximum wage subject to the tax for the year. Determine the amount of withholding for social security and Medicare taxes by multiplying each payment by the employee tax rate. There are no withholding allowances for social security and Medicare taxes.
To calculate FICA withholding, Acme should proceed as follows: 1  Calculate the Social Security taxable income. 2  Acme must first calculate the amount of John's pay subject to Social Security tax. Since there is no limit on Medicare withholding, and John's pay is not subject to any pretax deductions, the amount of his pay subject to Medicare tax is also $800. 2  Calculate the Social Security tax. 3  Acme multiplies the 2015 employee Social Security tax rate of 6.2% by the taxable income amount of $800.