Use the following tax rates, ceiling and maximum taxes: Employee and Employer OASDI: 6.20% $147,000 $9,114.00 Employee* and Employer HI: 1.45% No limit No maximum Self-employed OASDI: 12.4% $147,000 $18,228.00 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: 1. Carry the hourly rate and the overtime rate to 3 decimal places and then round off to 2 decimals places (round the hourly rate to 2 decimal places before multiplying by one and one-half to determine the overtime 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, drop the third decimal place. Also, use the minimum hourly wage of $7.25 in solving these problems and all that follow. Refer to Instruction 3-1. Dee is paid $2,345 on November 8, 20--. Dee had cumulative gross earnings, including overtime pay, of $145,700 prior to this pay. a) The amount of OASDI taxes to withhold from Dee's pay is __________. b) The amount of HI taxes to withhold from Dee's pay is __________.
Instruction 3-1
Use the following tax rates, ceiling and maximum taxes:
Employee and Employer OASDI: 6.20% $147,000 $9,114.00
Employee* and Employer HI: 1.45% No limit No maximum
Self-employed OASDI: 12.4% $147,000 $18,228.00
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:
1. Carry the hourly rate and the overtime rate to 3 decimal places and then round off to 2 decimals places (round the hourly rate to 2 decimal places
before multiplying by one and one-half to determine the overtime 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, drop the third decimal place.
Also, use the minimum hourly wage of $7.25 in solving these problems and all that follow.
| a) | The amount of OASDI taxes to withhold from Dee's pay is __________. |
| b) | The amount of HI taxes to withhold from Dee's pay is __________. |
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