Note: In this chapter and in all succeeding work throughout the course, unless instructed otherwise, use the following rates, ceiling, and maximum taxes. Employee and Employer OASDI: 6.20% $118,500 $7,347 Employee* and Employer HI: 1.45% No limit No maximum Self-employed OASDI: 12.4% $118,500 $14,694 Self-employed HI: 2.9% No limit No maximum 1. Carry the hourly rate and the overtime rate to 3 decimal places and then round off to 2 decimal places (round the hourly rate to 2 decimal places before multiplying by one and one-half to determine the over-time rate). 2. If the third decimal place is 5 or more, round to the next higher cent. 3. If the third decimal place is less than 5, simply drop the third decimal place. Examples: Monthly rate $1,827 Weekly rate ($1,827 12)/52 = $421.615 rounded to $421.62 Hourly rate $421.62/40 = $10.540 rounded to $10.54 O.T. rate $10.54 1.5 = $15.81 Also, use the minimum hourly wage of $7.25 in solving these problems and all that follow. *Employee HI: Plus an additional 0.9% on wages over $200,000. Also applicable to self-employed. Example 3-1 In 20-- the annual salaries paid each of the officers of Perez, Inc., follow. The officers are paid semimonthly on the 15th and the last day of the month. Compute the FICA taxes to be withheld from each officer's pay on (a) November 15 and (b) December 31. Round your answers to the nearest cent. If an amount is zero, enter "0". a. November 15 Name and Title Annual Salary OASDI Taxable Earnings OASDI Tax HI Taxable Earnings HI Tax Perez, Paul, President $136,800 $ $ $ $ Donald, Donna, VP Finance 120,000 Funke, Jack, VP Sales 76,800 Weis, Al, VP Mfg. 92,400 Lang, Hope, VP Personnel 78,000 Lee, Amy, VP Secretary 52,800 b. December 31 Name and Title Annual Salary OASDI Taxable Earnings OASDI Tax HI Taxable Earnings HI Tax Perez, Paul, President $136,800 $ $ $ $ Donald, Donna, VP Finance 120,000 Funke, Jack, VP Sales 76,800 Weis, Al, VP Mfg. 92,400 Lang, Hope, VP Personnel 78,000 Lee, Amy, VP Secretary 52,800