How much money is typically taken out of your paycheck?
Quick Answer
The withholding rates for 2015 include Social Security withholding of 6.2 percent for the employer and 6.2 percent for the employee for a total of 12.4 percent; Medicare withholding is 1.45 percent for the employer and a matching 1.45 percent for the employee for a total of 2.9 percent, according to the Internal Revenue Service. Employers are responsible for deducting these amounts from an employee's gross wages and making payments to the United States Treasury on the employee's behalf.
Continue ReadingFull Answer
Social Security withholding has a wage base limit that is subject to change from tax year to tax year. For the tax year 2015, wages up to $118,500 are subject to the 12.4 percent withholding rates mentioned above. Medicare withholding has no such wage base limit; as a result, all wages earned are subject to the 2.9 percent Medicare tax withholding, according to the IRS.
When determining how much money to withhold from an individual's paycheck, employers user a tax table that takes into account the employee's number of allowances as claimed on the employee's W-4 Certificate of Withholding. The number of allowances claimed directly impacts how much is deducted from your check each pay period and the size of any refund that the taxpayer might be due each year. When an employee claims zero allowances, the maximum amount of taxes is withheld, according to RapidTax.
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