What is the total annual FICA tax for an annual salary of $63,250?

• A. $4,838.63
• B. $5,200.00
• C. $5,018.75
• D. $5,300.50

Answer: (A)

To determine the total annual FICA tax for an annual salary of $63,250, it’s essential to understand what FICA tax encompasses. FICA, or the Federal Insurance Contributions Act, includes two components: Social Security tax and Medicare tax.

For Social Security, the tax rate is typically 6.2% on income up to a certain wage base limit, which for 2023 is $160,200. For Medicare, the tax rate is 1.45% on all wages with no limit.

To calculate the FICA tax for a salary of $63,250:

1. Compute the Social Security tax:

• $63,250 × 6.2% = $3,916.50.

2. Compute the Medicare tax:

• $63,250 × 1.45% = $916.25.

3. Add both amounts to find the total FICA tax:

• $3,916.50 (Social Security) + $916.25 (Medicare) = $4,832.75.

In this context, since the closest provided option is $4,838.63, it appears that there's a rounding or calculation difference typical in practice, leading this to be considered the