How much does an employer pay into the Social Security system on behalf of an employee?

Prepare for the Edmentum Personal Finance Exam with flashcards and multiple-choice questions. Gain insights with explanations and hints for each question. Get ready for your test!

Employers pay 6.2 percent of an employee's gross wages into the Social Security system. This contribution is part of the Federal Insurance Contributions Act (FICA) taxes, which fund Social Security and Medicare. The 6.2 percent rate applies to earnings up to a specified wage limit, known as the Social Security wage base limit, which is adjusted annually.

In addition to the employer's contribution, employees also contribute an equal amount of 6.2 percent of their wages, meaning that a total of 12.4 percent of an employee’s wages goes towards Social Security when combining both the employer and employee contributions. The other options presented do not reflect the correct percentage that employers contribute specifically to Social Security, as they either represent outdated rates or hypothetical figures unrelated to current FICA tax requirements.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy