Damerly Company (a Utah employer) wants to give a holiday bonus check of $125 to each employee. Since it wants the check amount to be $125, it will need to gross-up the amount of the bonus. Calculate the withholding taxes and the gross amount of the bonus to be made to John Rolen if his cumulative earnings for the year are $46,910. Besides being subject to social security taxes and federal income tax (supplemental rate), a 4.95% Utah income tax must be withheld on supplemental payments. Enter deductions beginning with a minus sign (-). You may need to adjust by a penny (subtract or add) to the gross amount to get net pay to calculate exactly to $125.00. Round your calculations and final answers to the nearest cent. Gross bonus amount Federal income tax withheld OASDI tax withheld HI tax withheld Utah income tax withheld Take-home bonus check Example 4-12 GROSSING-UP. Cotter Company wants to award a $4,000 bonus to Donna D'Amico. In addition, it wants the net bonus payment to equal $4,000 Assuming D'Amico is still under the OASDI/FICA limit, the calculation would be: $4,000 A. 1 -0.22 (Supplemental W/H rate) - 0.062 (OASDI) -0.0145 (HI) $4,000 B $5,685.86 grossed-up bonus 0.7035 c $5,685.85 Gross bonus amount Federal income tax withheld 1,250.89 OASDI tax withheld 352.52 HI tax withheld 82.44 Take-home bonus check $4,000.00 If state or local taxes apply, they must also be included in the formula. "Need to subtract $0.01 from $5,685.86 in order to arrive at $4,000.00 (due to rounding)