Certified Payroll Professional Practice Exam

What is the Medicare Wage Base with respect to withholding?

1. No limit

2. $100,000

3. $117,000

4. $150,000

The correct answer is: No limit

The correct answer is A: No limit. This is because there is no specific limit on the wage base when it comes to withholding Medicare taxes. Medicare tax is a flat rate that applies to all earned income without a maximum limit, unlike Social Security tax which has a wage base limit that changes annually. Therefore, regardless of how much an employee earns, Medicare tax will continue to be withheld without any cap. Options B, C, and D are incorrect because they provide specific dollar amounts as Medicare wage base limits, which is not the case in reality.