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Question

A social securit y tax of 6.2 % applies to a maximum wage of $87,900. The Medicare tax rate of 1.45 % applie s to all wages. What total did Liza pay for these two taxes on her yearly income of$90,000?

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In this exercise, we calculate the total amount Liza has to pay for her Medicare and Social Security Taxes given that she has an annual income of $90,000\$90,000. The social security taxes make up 6.25%6.25\% of her annual pay up to $87,900\$87,900 while the medicare tax makes up 1.45%1.45\% of all wages.

What values are we going to find so that we can calculate the total taxes?

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