To determine the employer's yearly contribution to the U.S. Medicare tax on an employee's salary of [tex]$37,500, follow these steps:
1. Identify the Salary: The employee's yearly salary is $[/tex]37,500.
2. Determine the Medicare Tax Rate: According to the given data, the employer's responsibility for the Medicare tax rate is 1.45%.
3. Convert the Tax Rate to a Decimal: The percentage needs to be converted to a decimal to perform the calculation. To do this, divide 1.45% by 100:
[tex]\[
1.45\% = \frac{1.45}{100} = 0.0145
\][/tex]
4. Calculate the Medicare Tax Contribution: Multiply the salary by the Medicare tax rate (as a decimal) to find the employer's contribution.
[tex]\[
\text{Medicare Tax Contribution} = \text{Salary} \times \text{Medicare Tax Rate (Decimal)}
\][/tex]
Substitute the values:
[tex]\[
\text{Medicare Tax Contribution} = 37,500 \times 0.0145
\][/tex]
5. Perform the Multiplication:
[tex]\[
37,500 \times 0.0145 = 543.75
\][/tex]
Thus, the employer's yearly contribution to the U.S. Medicare tax on a salary of [tex]$37,500 is \$[/tex]543.75.
