Chapter 11, Problem 8RQ

To determine

Employee Payroll withholding deductions:

In U.S., Employee Payroll withholding deductions include payroll withholding taxes and also nontax amounts. Payroll withholding taxes means the taxes which the employer needs to withhold from the employee’s gross pay and they include Federal Income Tax, State Income tax, Social Security and Medicare Taxes also known as FICA (Federal Insurance Contribution Act). The employer needs to deduct these taxes and remit them to the appropriate Government on timely basis.

Apart from the Payroll withholding taxes, the employers may deduct non tax amounts which may include Insurance policies, union dues, charitable contributions, U.S. saving bond purchases or for payments owed to the company on account of company merchandised purchased.

To determine:

The required employee payroll withholding deductions and the tax rate for each of them.