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 During 2016, Rachael Parkins, president of Mathieson Company, was paid a semimonthly salary of $7,200 Compute the amount of FICA taxes that should be withheld from her Round your answers to the nearest cent If an amount is zero, enter 0 OASDI HI a 9th paycheck $ $ b 17th paycheck $ $ c 24th paycheck $ $ d If Rachael Parkins year to date earnings as of her 24th paycheck are $168,000, and her year end bonus is $100,000, how much is the additional 0 9 HI tax withheld $ Question 2 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 your answers to 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 Hanks, Timothy, President $138480 $ $ $ $ Grath, John, VP Finance 114720 James, Sally, VP Sales 75600 Kimmel, Joan, VP Mfg 55200 Wie, Pam, VP Personnel 54000 Grant, Mary, VP Secretary 39600 b December 31 Name and Title Annual Salary OASDI Taxable Earnings OASDI Tax HI Taxable Earnings HI Tax Hanks, Timothy, President $138480 $ $ $ $ Grath, John, VP Finance 114720 James, Sally, VP Sales 75600 Kimmel, Joan, VP Mfg 55200 Wie, Pam, VP Personnel 54000 Grant, Mary, VP Secretary 39600 Question 3 Problem 3 8A (Algorithmic) 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 4 George Talbot receives wages amounting to $93,500 His net earnings from self employment amount to $28,600 Talbot must count $25,000 of his earnings in determining taxable self employment income for OASDI taxes FICA Taxable Wage Base Wages Received Taxable Self Employment Income $118,500 $93,500 $25,000 Ralph Henwood was paid a salary of $79000 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 $49500 on his income tax return for 20 Compute the following round your answers to the nearest cent 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 $ Check My Work Question 4 Problem 3 9A 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 Example 3 2 Wallington Company has 100 employees, each earning $525 25 a week OASDI Amount of OASDI tax withheld from each employees 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 employees 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) Empty Fields Company pays its salaried employees monthly on the last day of each month The annual salary payroll for 20 follows Compute the following for the payroll of December 31 If required, round your answers to nearest cent and use the rounded answers in subsequent computations Round your final answers to the nearest cent Employee Annual Salary OASDI Taxable Wages OASDI Tax HI Taxable Wages HI Tax Utley, Genna $37,040 $ $ $ $ Werth, Norm 48,900 $ Bass, John 40,000 $ Ruiz, Sam 120,000 $ Compton, Sue 36,900 $ Williams, Mary 48,500 $ Patel, Raymond 106,080 $ Carson, Abe 56,900 $ Livinsky, Sarah 37,850 $ Harper, Mark 51,200 $ Totals 583,370 $ $ $ $ Employer's OASDI Tax $ Employer's HI Tax $ Feedback Calculate OASDI Taxable Wages for any employee earning over the OASDI ceiling consider year to date earnings prior to current pay period and compute OASDI taxable wages for current pay period Multiply OASDI Taxable Wages by OASDI rate Multiply HI taxable earnings by HI rate

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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

During 2016, Rachael Parkins, president of Mathieson Company, was paid a semimonthly salary of $7,200. Compute the amount of FICA taxes that should be withheld from her. Round your answers to the nearest cent. If an amount is zero, enter "0".

	OASDI	HI
a. 9th paycheck	$	$
b. 17th paycheck	$	$
c. 24th paycheck	$	$
d. If Rachael Parkins year-to-date earnings as of her 24th paycheck are $168,000, and her year-end bonus is $100,000, how much is the additional 0.9% HI tax withheld?		$

Question 2

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 your answers to nearest cent. 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	$138480	$	$	$	$
Grath, John, VP Finance	114720
James, Sally, VP Sales	75600
Kimmel, Joan, VP Mfg.	55200
Wie, Pam, VP Personnel	54000
Grant, Mary, VP Secretary	39600

		December 31
Name and Title	Annual Salary	OASDI Taxable Earnings	OASDI Tax	HI Taxable Earnings	HI Tax
Hanks, Timothy, President	$138480	$	$	$	$
Grath, John, VP Finance	114720
James, Sally, VP Sales	75600
Kimmel, Joan, VP Mfg.	55200
Wie, Pam, VP Personnel	54000
Grant, Mary, VP Secretary	39600

Question 3

Problem 3-8A (Algorithmic)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 3-4George Talbot receives wages amounting to $93,500. His net earnings from self-employment amount to $28,600. Talbot must count $25,000 of his earnings in determining taxable self-employment income for OASDI taxes.

FICA Taxable Wage Base		Wages Received	=	Taxable Self Employment Income
$118,500		$93,500	=	$25,000

Ralph Henwood was paid a salary of $79000 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 $49500 on his income tax return for 20--. Compute the following; round your answers to the nearest cent.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	$

Check My Work

Question 4

Problem 3-9ANote: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 3-1Example 3-2Wallington Company has 100 employees, each earning $525.25 a week.

OASDI
Amount of OASDI tax withheld from each employees 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 employees 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)]

Empty Fields Company pays its salaried employees monthly on the last day of each month. The annual salary payroll for 20-- follows. Compute the following for the payroll of December 31:If required, round your answers to nearest cent and use the rounded answers in subsequent computations. Round your final answers to the nearest cent.

Employee	Annual Salary	OASDI Taxable Wages	OASDI Tax	HI Taxable Wages	HI Tax
Utley, Genna	$37,040	$	$	$	$
Werth, Norm	48,900	$
Bass, John	40,000	$
Ruiz, Sam	120,000	$
Compton, Sue	36,900	$
Williams, Mary	48,500	$
Patel, Raymond	106,080	$
Carson, Abe	56,900	$
Livinsky, Sarah	37,850	$
Harper, Mark	51,200	$
Totals	583,370	$	$	$	$

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

Feedback Calculate OASDI Taxable Wages; for any employee earning over the OASDI ceiling consider year-to-date earnings prior to current pay period and compute OASDI taxable wages for current pay period. Multiply OASDI Taxable Wages by OASDI rate. Multiply HI taxable earnings by HI rate.