Florida Building Contractor Business/Finance Practice Exam

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Prepare for the Florida Building Contractor Exam with comprehensive study resources and practice questions. This quiz focuses on the business and finance aspects of contracting, helping you understand critical topics needed for passing the exam.

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What is the combined rate for the Social Security Tax and the Medicare tax to be withheld from each employee's gross wages up to $113,700 in 2013?

6.25%
7.65%
8.75%
9.50%

The correct answer is: 7.65%

The combined rate for the Social Security Tax and the Medicare tax withheld from each employee's gross wages is 7.65%. This rate consists of two components: the Social Security tax, which is set at 6.2% on wages up to the taxable wage base (which was $113,700 for the year 2013), and the Medicare tax, which is 1.45% on all wages without a limit. When you add these two percentages together, you arrive at the total withholding rate of 7.65%. Understanding this combined rate is crucial for payroll calculations as employees rely on accurate withholding to ensure compliance with federal laws and to anticipate their tax liabilities. The numbers change over time, but for the year 2013, 7.65% was the total amount to be withheld for Social Security and Medicare.