To determine the employer's yearly contribution to the U.S. Social Security tax on a salary of [tex]$40,000, we need to follow these steps:
1. Identify the salary: The given salary is $[/tex]40,000.
2. Find the employer's Social Security tax rate: According to the table, the employer's responsibility for Social Security tax is 6.20%.
3. Convert the percentage to a decimal: The Social Security tax rate of 6.20% can be converted to a decimal by dividing it by 100. This gives us 0.062.
4. Calculate the yearly contribution: To find the employer's yearly contribution, we multiply the salary by the decimal tax rate.
[tex]\[
\text{Employer's yearly contribution} = \text{Salary} \times \text{Social Security tax rate}
\][/tex]
Plugging in the values:
[tex]\[
\text{Employer's yearly contribution} = 40,000 \times 0.062
\][/tex]
5. Compute the product: When we multiply [tex]$40,000 by 0.062, we get:
\[
40,000 \times 0.062 = 2,480
\]
Thus, the employer's yearly contribution to the U.S. Social Security tax on a salary of $[/tex]40,000 is \$2,480.
