Answer:
E. $3,281.85
Explanation:
The following are given in the question:
Employee earnings in the current year = $42,900
FICA Social Security = 6.2%
FICA Medicare = 1.45%
Since the employee earning is still below $128,400 maximum per year, the employer's total FICA payroll tax for this employee can be calculated as follows:
Total FICA payroll tax = Employee earnings in the current year * (FICA Social Security + FICA Medicare) .................... (1)
Substituting the values into equation (1), we have:
Total FICA payroll tax = $42,900 * (6.2% + 1.45%)
Total FICA payroll tax = $42,900 * 7.65%
Total FICA payroll tax = $3,281.85
Therefore, the correct option is E. $3,281.85.
