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Money and the economyLesson 5 of 8

Part 1 of 3, 0 done

13 min

Taxes: sales, income and payroll

A café owner touches three taxes before lunch: the sales tax on every latte, and the income tax and payroll tax on every paycheck. Only some of that money is ever the café's. Here's who really pays each one.

Ticket 01 · The guess

The tax on every paycheck

Almost every US paycheck carries Social Security and Medicare tax. Some comes out of the worker's pay, and the employer pays some on top. On $1,000example (example number: Simplified example: a worker's pay.) of pay, how much do the two of them pay together?

$50
$0$300
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Sources and every number (1)

Sources

  • Topic no. 751, Social Security and Medicare withholding rates · Internal Revenue Service, 2026

Every number

  • 6.2%irs.gov ·2026 · Social Security tax rate, paid by the employee and again by the employer.
  • 1.45%irs.gov ·2026 · Medicare tax rate, paid by the employee and again by the employer.
  • $1,000example (example number: Simplified example: a worker's pay.) · Simplified example: a worker's pay.
  • $153example (example number: Worked out: Social Security plus Medicare, from the worker and again from the employer, on the example pay.) · Worked out: Social Security plus Medicare, from the worker and again from the employer, on the example pay.
  • $76.50example (example number: Worked out: the worker's half (or the employer's) on the example pay.) · Worked out: the worker's half (or the employer's) on the example pay.
  • $184,500irs.gov ·2026 · Pay in 2026 up to which Social Security tax applies (the wage base). Medicare has no such limit.
  1. Lessons›
  2. Money and the economy
  • ·Before this: Recessions: when the economy shrinks
  • ·Next: Tariffs and trade
Skip to the lesson

Money and the economyLesson 5 of 8

Part 1 of 3, 0 done

13 min

Taxes: sales, income and payroll

A café owner touches three taxes before lunch: the sales tax on every latte, and the income tax and payroll tax on every paycheck. Only some of that money is ever the café's. Here's who really pays each one.

Ticket 01 · The guess

The tax on every paycheck

Almost every US paycheck carries Social Security and Medicare tax. Some comes out of the worker's pay, and the employer pays some on top. On $1,000example (example number: Simplified example: a worker's pay.) of pay, how much do the two of them pay together?

$50
$0$300
Words to know

Spot something wrong?

Tell us what looks off. No name or email needed.

What kind of problem?

0 / 1000

We'll also send this page, the lesson, ticket 1, so we can find it. Nothing else. Privacy

·
Sources and every number (1)

Sources

  • Topic no. 751, Social Security and Medicare withholding rates · Internal Revenue Service, 2026

Every number

  • 6.2%irs.gov ·2026 · Social Security tax rate, paid by the employee and again by the employer.
  • 1.45%irs.gov ·2026 · Medicare tax rate, paid by the employee and again by the employer.
  • $1,000example (example number: Simplified example: a worker's pay.) · Simplified example: a worker's pay.
  • $153example (example number: Worked out: Social Security plus Medicare, from the worker and again from the employer, on the example pay.) · Worked out: Social Security plus Medicare, from the worker and again from the employer, on the example pay.
  • $76.50example (example number: Worked out: the worker's half (or the employer's) on the example pay.) · Worked out: the worker's half (or the employer's) on the example pay.
  • $184,500irs.gov ·2026 · Pay in 2026 up to which Social Security tax applies (the wage base). Medicare has no such limit.
  1. Lessons›
  2. Money and the economy
  • ·Before this: Recessions: when the economy shrinks
  • ·Next: Tariffs and trade