Discuss APA FPC-Remote Exam Topic 5 Question 26

Using the following information from a payroll journal, calculate the total Social Security tax liability for the first payroll of the year:

A$3,664.20

B$3,695.20

C$3,881.20

D$4,788.90

Suggested Answer: C

Comprehensive and Detailed Explanation:

Social Security tax is 6.2% for both the employer and employee, so total liability is 12.4% of Social Security taxable wages.

Calculate Social Security taxable wages:

Gross pay: $32,500.00

Less pre-tax deductions (Health Insurance & 401k do NOT reduce Social Security taxable wages):

Taxable Wages = $32,500.00 - $1,200.00 = $31,300.00

Calculate Social Security tax (12.4% total for employer & employee):

$31,300 12.4% = $3,881.20

Thus, the correct answer is C. $3,881.20.

IRS Publication 15 -- Employer's Tax Guide

Payroll.org -- Social Security and Medicare Tax Rules

12 comments · newest first

Lynda 3 days ago

Wow, I didn't expect it to be that high!

Xenia 8 days ago

I disagree, I got $3,664.20.

Olene 13 days ago

I think it's option B, $3,695.20.

Trinidad 18 days ago

Definitely A, the calculations add up perfectly!

Trevor 23 days ago

Wait, how did we get to D) $4,788.90? That seems off!

Rodolfo 29 days ago

C) $3,881.20 seems too high, right?

Ahmad 1 month ago

I disagree, it has to be B) $3,695.20.

Dorian 1 month ago

I think the answer is A) $3,664.20.

Ronald 1 month ago

I’m a bit confused about whether to include any overtime pay in the Social Security calculation. Did we cover that in class?

Jenise 2 months ago

I feel like the answer might be closer to option A, but I could be mixing up the calculations from our practice tests.

Bethanie 2 months ago

I remember a similar question where we had to apply the 6.2% rate to the wages. I hope I can recall the right figures here.

Marti 2 months ago

I think we need to calculate the total wages subject to Social Security tax first, but I'm not entirely sure how to find that from the journal.

APA FPC-Remote Exam - Topic 5 Question 26 Discussion