Under the Federal Insurance Contributions Act (FICA), how do the social security and Medicare portions differ in the way they apply to an employee's wages? A Medicare stops at an annual wage base, while social security applies to all wages. B Both stop at the same annual wage base, which the law sets anew each year. C Neither stops at a wage base; the two simply use different tax rates. D Social security stops at an annual wage base, while Medicare applies to all wages.
Practice questions based on the PayrollOrg Fundamental Payroll Certification content outline and on federal payroll authorities including IRS Publication 15 (Circular E), Publication 15-A, Publication 15-B, the Fair Labor Standards Act, and the Consumer Credit Protection Act. FPC and CPP are marks of PayrollOrg; this site is not affiliated with or endorsed by PayrollOrg. Amounts that are adjusted each year — wage bases, contribution limits, the minimum wage, mileage and per-diem rates — are given inside the question rather than tested from memory, and state-specific rules are out of scope. Confirm the current content outline and the current-year figures from the official sources before testing.
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