What is the combined employee-side rate for Social Security and Medicare taxes in the example?

• A. 6.2% total
• B. 1.45% total
• C. 7.65% total
• D. 7.65% with wage base cap

Answer: (C)

The combined employee-side rate for Social Security and Medicare taxes is found by adding the two separate employee portions: 6.2% for Social Security on wages up to the Social Security wage base, plus 1.45% for Medicare on all wages. When both taxes apply (i.e., within the Social Security wage base), the total is 7.65%. The Social Security portion is capped, so beyond that cap you’d still pay Medicare at 1.45% but not the 6.2%, meaning the overall rate isn’t fixed at 7.65% for all earnings. The wage-base cap only affects the Social Security portion, not Medicare.