What rate do both employees and employers pay for the HI portion of FICA in 2016?

The correct answer is 1.45%. In 2016, both employees and employers were required to pay this rate for the Hospital Insurance (HI) portion of the Federal Insurance Contributions Act (FICA) tax. The HI tax is specifically designed to fund Medicare, providing health coverage for individuals aged 65 and older, along with certain younger individuals with disabilities or specific health conditions.

In this context, it is important to recognize that the FICA tax consists of two parts: the Social Security tax and the Medicare tax. The rate of 1.45% applies uniformly to both parties, making it crucial for payroll calculations and accounting for any employer payroll taxes.

The other rates listed do not apply to the HI portion of FICA during that year and are not relevant for payroll purposes regarding the Medicare tax. Therefore, understanding this specific rate is essential for accurate payroll processing and compliance with federal regulations.