1. Warmup
Roger started working for a new company. He gets 5 days paid vacation immediately. He gets another 5 days vacation for every 6 years he is at the company. How many days of vacation does he have after 25 years with the company?
Sarah gets paid monthly. Each paycheck she has $ deducted for health insurance. If her share of the total cost is 16%, how much is the employer’s share each month?

2. Warmup
Josh is planning to retire after 30 years as a teacher. His pension gives him 2% for every year of service based on the average of his last three years. His earnings for the last 3 years are $65,200, $67,100 and $69,300. How much pension will Josh receive?
Jennifer is eligible for unemployment insurance. If she is entitled to 66% of her average weekly earnings over the last 26 weeks and her earnings for that period were $13,248, what will her weekly unemployment benefit be?

3. 6-5 SOCIAL SECURITY AND MEDICARE
Banking
11/13/2018
6-5 SOCIAL SECURITY AND MEDICARE
LEARNING TARGETS
To compute paycheck deductions for Social Security.
To compute paycheck deductions for Medicare.
Chapter 1

4. Key Terms FICA tax maximum taxable income Social Security tax
Medicare tax
maximum taxable income

5. Example 1
Ramiro got his first job in In that year, Social Security tax was 6.2% of income up to $94,200. Medicare tax was 1.45%. If Ramiro earned $73,210 in 2006, how much did he pay for Social Security and Medicare taxes?

6. CHECK YOUR UNDERSTANDING
Lisa made a total of $121,418 last year, when the maximum taxable income for the year was $94,600. Social Security tax was 6.2% and Medicare tax was 1.45%. How much did Lisa pay for Social Security and Medicare combined?

7. Express the Social Security tax for 2006 as a piecewise function.
Example 2
Express the Social Security tax for 2006 as a piecewise function.

8. CHECK YOUR UNDERSTANDING
Express the Medicare tax for 2006 as a piecewise function.

9. Graph the Social Security tax piecewise function from Example 2.

11. CHECK YOUR UNDERSTANDING
Mark’s Social Security tax was $3,500 during the year in the graph in Example 3. Use the graph to approximate his taxable income.

12. EXAMPLE 4
In 1988, Social Security tax was 7.51%, to the maximum income of $45,000. If Grace paid $2,348 for Social Security tax, how much did she earn?

13. CHECK YOUR UNDERSTANDING
In 1988 Ramona paid $2, in Social Security tax. What was Ramona’s taxable income in 1988?