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

1. 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

1. 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.