|Payroll Tax Rates|
|Social Security tax rate||6.20%|
|Medicare tax rate||1.45%|
|Total payroll taxes||7.65%|
If an employee earns $1,000, the payroll taxes are:
|Social Security tax||$62.00|
|Total payroll taxes||$76.50|
The employer sends the $76.50 to the federal government.
There is a maximum annual amount of Social Security tax withheld per employee. Social Security taxes are not withheld on amounts over the earnings limit. For 2008, the earnings limit was $102,000, and the maximum Social Security tax was $6,324 ($102,000 X 6.2%). There is no limit on the amount of wages subject to Medicare tax.
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