EXAMPLE 3-1
Casey Berra, employed by Gobel Company, earned $460 during the week ended January 25, 20--. Prior to January 25, Berra’s cumulative gross earnings for the year were $2,765.70. FICA taxes to be withheld on $460 are computed as follows:
| OASDI | HI | |||
|---|---|---|---|---|
| Taxable Wages | $460 | Taxable Wages | $460 | |
| Tax Rate | × 6.2% | Tax Rate | × 1.45% | |
| OASDI Tax to Be Withheld | $28.52 | HI Tax to Be Withheld | $6.67 |
Francis Aha, a salaried employee of Wilson Advertising Agency, is paid every Friday. She earned $1,925 for this pay. Prior to the pay of November 1, 20--, she had earned $159,750. The FICA taxes to be withheld from Aha’s pay on November 1 are computed as follows:
| OASDI | HI | |||
|---|---|---|---|---|
| Taxable Wage Limit | $160,200 | Taxable Wage Limit | NONE | |
| Wages Paid to Date | 159,750 | Wages Paid to Date | $159,750 | |
| Taxable Wages This Pay | $450 | Taxable Wages This Pay | $1,925 | |
| Tax Rate | × 6.2% | Tax Rate | × 1.45% | |
| OASDI Tax to Be Withheld | $27.90 | HI Tax to Be Withheld | $27.91 |
Marc Garcia, president of Uni-Sight, Inc., is paid $6,875 semimonthly. Prior to his last pay on December 27,
20--, Garcia had earned $158,125. The FICA taxes to be withheld from Garcia's pay on December 27 are computed as follows:
| OASDI | HI | |||
|---|---|---|---|---|
| Taxable Wage Limit | $160,200 | Taxable Wage Limit | NONE | |
| Wages Paid to Date | 158,125 | Wages Paid to Date | $158,125 | |
| Taxable Wages This Pay | $2,075 | Taxable Wage This Pay | $6,875 | |
| Tax Rate | × 6.25% | Tax Rate | × 1.45% | |
| OASDI Tax to Be Withheld | $128.65 | HI Tax to Be Withheld | $99.69 |
Senja Matthews employed by Quality Company is paid $5,000 weekly. Prior to the pay of September 27, 20--, she had earned $200,000. The FICA taxes to be withheld from Jennifer’s pay on September 27 are computed as follows:
| OASDI | HI | |||
|---|---|---|---|---|
| Taxable Wage Limit | $160,200 | Taxable Wage Limit (Applicable on Wages at 1.45%) |
NONE |
|
| Wages Paid to Date | 200,000 | Wages Paid to Date | $200,000 | |
| Taxable Wages This Pay | $-0- | Taxable Wage This Pay | $5,000 | |
| OASDI Tax to Be Withheld | $-0- | Tax Rate | × 1.45% | |
| HI Tax to Be Withheld | $72.50 | |||
| Additional 0.9% HI Tax on wages in excess of $200,000 = $5,000 × 0.9 = |
45.00 |
|||
| Total HI Tax to be Withheld | $117.50 |