Problem Information

Use the following tax rates, ceiling and maximum taxes:
Employee and Employer OASDI:	6.20%	$127,200	$7,886.40
Employee* and Employer HI:	1.45%	No limit	No maximum
Self-employed OASDI:	12.4%	$127,200	$15,772.80
Self-employed HI:	2.9%	No limit	No maximum

*Employee HI: Plus an additional 0.9% on wages over $200,000. Also applicable to self-employed.

Rounding Rules: Unless instructed otherwise compute hourly rate and overtime rates as follows:

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 overtime rate).

If the third decimal place is 5 or more, round to the next higher cent.

If the third decimal place is less than 5, drop the third decimal place.

Also, use the minimum hourly wage of $7.25 in solving these problems and all that follow.

Eager, a tipped employee, reported to his employer that he had received $320 in tips during March. On the next payday, April 6, he was paid his regular salary of $400. Round your answers to the nearest cent.

a. The amount of OASDI taxes to withhold from Eager's pay is	$________
b. The amount of HI taxes to withhold from Eager's pay is	$________