Question

Haggerty Company pays its salaried employees monthly on the last day of each month. The annual salary payroll for 2015 follows. Compute the following for the payroll of December 31:

If an amount is zero, enter "0". Round your answers to the nearest cent.

Employee	Annual Salary	OASDI Taxable Wages	OASDI Tax	HI Taxable Wages	HI Tax
Stern, Myra	$42,150	$	$	$	$
Lundy, Hal	30,500
Franks, Rob	36,000
Haggerty, Alan	161,280
Ward, Randy	40,800
Hoskin, Al	29,600
Wee, Pam	106,800
Prince, Harry	76,800
Maven, Mary	24,000
Harley, David	68,960
Totals	$616890.00	$	$	$	$

Employer's OASDI Tax	$
Employer's HI Tax	$

Answer 1

The completed table is given as below:

Employee	Annual Salary	OASDI Taxable Wages (A)	OASDI Tax [A*(6.2% + 6.2%)]	HI Taxable Wages (B)	HI Tax [B*(1.45% + 1.45%)]
Stern, Myra	42,150.00	42,150.00	5,226.60	42,150.00	1,222.35
Lundy, Hal	30,500.00	30,500.00	3,782.00	30,500.00	884.50
Franks, Rob	36,000.00	36,000.00	4,464.00	36,000.00	1,044.00
Haggerty, Alan	161,280.00	118,500.00	14,694.00	161,280.00	4,677.12
Ward, Randy	40,800.00	40,800.00	5,059.20	40,800.00	1,183.20
Hoskin, Al	29,600.00	29,600.00	3,670.40	29,600.00	858.40
Wee, Pam	106,800.00	106,800.00	13,243.20	106,800.00	3,097.20
Prince, Harry	76,800.00	76,800.00	9,523.20	76,800.00	2,227.20
Maven, Mary	24,000.00	24,000.00	2,976.00	24,000.00	696.00
Harley, David	68,960.00	68,960.00	8,551.04	68,960.00	1,999.84
Totals	$616,890.00	$574,110.00	$71,189.64	$616,890.00	$17,889.81
Employer's OASDI Tax (71,189.64/2)	$35,594.82
Employer's HI Tax (17,889.81/2)	$8,944.91

_____

Notes:

1) For the tax year 2015,  the maximum amount of wages subject to OASDI tax is $118,500. Therefore, for Haggerty, Alan, we will take OASDI taxable wages as $118,500. For all the other employees, the amount of annual salary is less than the maximum cap of $118,500 and will, therefore, be taken as actual OASDI wages for 2015.

2) For the tax year 2015, the entire amount of annual salary is less subject to HI tax.