Question

The names of the employees of Hogan Thrift Shop are listed on the following payroll register. Employees are paid weekly. The marital status and the number of allowances claimed are shown on the payroll register, along with each employee's weekly salary, which has remained the same all year. Complete the payroll register for the payroll period ending December 22, the 51st weekly payday. The state income tax rate is 3.1% of total earnings, the city income tax rate is 1% of the total gross earnings, and the wage-bracket method is used for federal income taxes. Round your calculations and final answers to the nearest cent.

Click here to access the Table of Allowance Values.

Click here to access the Wage-Bracket Method Tables.

Click here to access the Percentage Method Tables for earnings beyond wage-bracket range.

Hogan Thrift Shop Payroll Register
Employee Name	Marital Status	No. of W/H Allowances	Total Earnings	Deductions
				(a) FICA		(b)	(c)	(d)	(e)
				OASDI	HI	FIT	SIT	CIT	Net Pay
Gold, Ken	M	3	$2,080.00	$	$	$	$	$	$
Morton, Cam	S	1	690.00
Wendal, Hal	M	0	675.00
Cox, Debbie	S	3	510.00
Hurley, Don	S	1	1,010.00
Hand, Cheryl	S	2	850.00
Welsh, Ronda	S	1	590.90
Ruiz, Stacy	M	3	611.15
Totals			$7,017.05	$	$	$	$	$	$

Compute the employer's FICA taxes for the pay period ending December 22.

OASDI Taxes		HI Taxes
OASDI taxable earnings	$	HI taxable earnings	$
OASDI taxes	$	HI taxes	$

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a. Using OASDI and HI rates, calculate appropriate taxes considering OASDI ceiling!
b. Calculate FIT using Wage Bracket method whenever possible; use Percentage Method if unable to use Wage Bracket method.
c. Calculate State Income tax on total earnings using rate given.
d. Calculate City Income tax on total earnings using rate given.
e. Calculate net pay by subtracting deductions from total earnings.
f. Calculate employer's FICA taxes for OASDI and HI using taxable earnings.

Answer 1

a,b,c,d,e Solutions:

				Deductions
				FICA
Employee Name	Marital Status	No. of W/H Allowances	Total Earnings	OASDI	HI	FIT	SIT	CIT	Net Pay
			(A)	(B=6.2%*A)	(C=1.45%*A)	D=Workings	(E=3.1%*A)	(F=1%*A)	(G=A-Deductions)
Gold Ken	M	3	2080	128.96	30.16	259.23	64.48	20.8	1576.37
Morton Cam	S	1	690	42.78	10.01	77	21.39	6.9	531.92
Wendal Hal	M	0	675	41.85	9.79	59	20.93	6.75	536.68
Cox Debbie	S	3	510	31.62	7.4	27	15.81	5.1	423.07
Hurley Don	S	1	1010	62.62	14.65	143	31.31	10.1	748.32
Hand Cheryl	S	2	850	52.7	12.33	90	26.35	8.5	660.12
Welsh Ronda	S	1	590.9	36.64	8.57	62	18.32	5.91	459.46
Ruiz Stacy	S	3	611.15	37.89	8.86	22	18.95	6.11	517.34
Totals			7017.05	435.06	101.77	739.23	217.54	70.17	5453.28

Workings for FIT calculation (Column D):

Total personal allowance per period*No. of allowances = 76.90*3 = $230.70

Excess of wages over allowances claimed = 2080-230.70 = $1,849.30

Percentage method = 198.40 + 0.25*(1849.30-1606) = 259.23 (Refer to percentage method table)

f Solution:

OASDI Taxabale Earnings	Column A	7017.05
OASDI Taxes	Column B	435.06
HI Taxabale Earnings	Column A	7017.05
HI Taxes	Column C	101.77