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 Abrew, 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 If required, round intermediate calculations and your answers to nearest cent Use rounded answers in subsequent calculations 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 Hanks, Timothy, President $141,600 $ $ $ $ Grath, John, VP Finance 119,000 James, Sally, VP Sales 69,600 Kimmel, Joan, VP Mfg 54,000 Wie, Pam, VP Personnel 51,600 Grant, Mary, VP Secretary 49,200 b December 31 Name and Title Annual Salary OASDI Taxable Earnings OASDI Tax HI Taxable Earnings HI Tax Hanks, Timothy, President $141,600 $ $ $ $ Grath, John, VP Finance 119,000 James, Sally, VP Sales 69,600 Kimmel, Joan, VP Mfg 54,000 Wie, Pam, VP Personnel 51,600 Grant, Mary, VP Secretary 49,200

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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

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 Abrew, 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.

If required, round intermediate calculations and your answers to nearest cent. Use rounded answers in subsequent calculations. If an amount is zero, enter "0".

		November 15
Name and Title	Annual Salary	OASDI Taxable Earnings	OASDI Tax	HI Taxable Earnings	HI Tax
Hanks, Timothy, President	$141,600	$	$	$	$
Grath, John, VP Finance	119,000
James, Sally, VP Sales	69,600
Kimmel, Joan, VP Mfg.	54,000
Wie, Pam, VP Personnel	51,600
Grant, Mary, VP Secretary	49,200

		December 31
Name and Title	Annual Salary	OASDI Taxable Earnings	OASDI Tax	HI Taxable Earnings	HI Tax
Hanks, Timothy, President	$141,600	$	$	$	$
Grath, John, VP Finance	119,000
James, Sally, VP Sales	69,600
Kimmel, Joan, VP Mfg.	54,000
Wie, Pam, VP Personnel	51,600
Grant, Mary, VP Secretary	49,200