Example 3-2

Wallington Company has 100 employees, each earning $525.25 a week.

OASDI
Amount of OASDI tax withheld from each employee's paycheck each week:		$32.57		(6.2% $525.25)
Total tax withheld from the 100 employees' wages:		$3,257.00		($32.57 100)
Tax on employer:		$3,256.55		[6.2% ($525.25 100)]
HI
Amount of HI tax withheld from each employee's paycheck each week:		$7.62		(1.45% $525.25)
Total tax withheld from the 100 employees' wages is:		$762.00		($7.62 100)
Tax on employer:		$761.61		[1.45% ($525.25 100)]

Audrey Martin and Beth James are partners in the Country Gift Shop, which employs the individuals listed below. Paychecks are distributed every Friday to all employees. Based on the information given, compute the amounts listed below for a weekly payroll period. Hint: It is important to ascertain whether a person's wages are considered wages or drawings.

If an amount is zero, enter "0". Round your computations to the nearest cent.

Name and Position	Salary	OASDI Taxable Earnings	OASDI Tax	HI Taxable Earnings	HI Tax
Zena Vertin, Office	$ 700 per week
Nicole Norge, Sales	2,980 per month
Bob Mert, Delivery	485 per week
Audrey Martin, Partner	950 per week
Beth James, Partner	950 per week
	Totals

Employer's OASDI Tax	$
Employer's HI Tax	$

Example 3-5

George Talbot receives wages amounting to $111,500. His net earnings from self-employment amount to $28,600. Talbot must count $26,200 of his earnings in determining taxable self-employment income for OASDI taxes.

OASDI Taxable Wage Base		Wages Received	=	OASDI Taxable SelfEmployment Income
$137,700		$111,500	=	$26,200

Ralph Henwood was paid a salary of $64,600 during 20-- by Odesto Company. In addition, during the year Henwood started his own business as a public accountant and reported a net business income of $80,000 on his income tax return for 20--. Compute the following:

a. The amount of FICA taxes that was withheld from his earnings during 20-- by Odesto Company.

OASDI	$
HI	$

b. Henwood's self-employment taxes on the income derived from the public accounting business for 20--.

OASDI	$
HI	$

Example 3-1

The monthly and hourly wage schedule for the employees of Quirk, Inc., follows. No employees are due overtime pay.

Compute the following for the last monthly pay of the year, rounded to the nearest cent:

a. The total wages of each part-time employee for December 20--. b. The OASDI and HI taxable wages for each employee. c. The FICA taxes withheld from each employee's wages for December. d. Totals of columns. (Totals should include both full-time and part-time employees.) e. The employer's FICA taxes for the month.

Employees		Total Monthly Payroll		OASDI Taxable Wages	OASDI Tax	HI Taxable Wages	HI Tax
Full-Time Office:
Adaiar, Gene		$2,450.00
Crup, Jason		2,300.00
Essex, Joan		2,975.00
Garza, Irma		2,985.00
Leason, Mel		2,900.00
Pruit, Marne		7,000.00
Rubble, Deanne		2,400.00
Simpson, Mick		3,985.00
Truap, Ann		5,000.00
Wilson, Trudy		2,440.00

	Hours Worked		Hourly Rate		Total Monthly Payroll		OASDI Taxable Wages		OASDI Tax		HI Taxable Wages		HI Tax
Part-Time Office:
Kyle, Judy	170		$12.50
Laird, Sharon	170		12.60
Maxwell, Sara	140		14.00
Nelson, Donna	145		14.20
Scott, Kim	162		15.65
Totals for all employees

		OASDI		HI
Employer's FICA taxes		$		$