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

The biweekly taxable wages for the employees of Rite-Shop follow. Compute the FICA taxes for each employee and the employer's FICA taxes.

					FICA Taxes
Employee No.	Employee Name	Biweekly Taxable Wages			OASDI	HI
711	Castro, Manny		$3,000.00		$	$
512	Corrales, Pat		970.00
624	Guitar, Joseph		1,002.00
325	Moore, Connie		1,123.40
422	Morrison, Harry		1,200.00
210	Robertson, Catherine		1,094.80
111	Swarez, Joseph		1,192.00
	Totals		$		$	$

Employer's OASDI	$		$
	Total Taxable Wages		Employer's OASDI Tax

Employer's HI Tax	$		$
	Total Taxable Wages		Employer's HI Tax