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Federal income tax, like social security tax, is paid by the employer and the 1 employee. 2 The wage limit for the social security tax
Federal income tax, like social security tax, is paid by the employer and the 1 employee. 2 The wage limit for the social security tax is the same as for the medicare tax. If an employee whose regular hourly rate is $9 and whose overtime rate is 1.5 times the regular rate works 42 hours in one week, the employee's gross pay is 3 $378. Each year, earnings in excess of the social security wage limit are not taxed for social security. (Tip: Read the section called Employee Withholdings" on the Employee 4. Taxes page in Canvas) The employee's marital status is one factor that determines the amount of federal 5 income tax withheld by the employer. The employee's earnings record is a summary of the annual earnings of that employee. (Tip: look at the picture of an earnings record on the Payroll Records page in 6 Canvas) John earned $3,000 in the last pay period of the year. Prior to that pay period he had cumulative earnings of $116,000. Assuming the social security rate is 6.2% 7 on a limit of $117,000, John's social security deduction for his last paycheck is $62
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