Question

Olney Company is a small manufacturing firm located in Allentown, Pennsylvania. The company has a workforce of both hourly and salaried employees. Each employee is paid for hours actually worked during each week, with the time worked being recorded in quarter-hour increments. The standard workweek consists of 40 hours, with all employees being paid time and one-half for any hours worked beyond the 40 regular hours.

   Wages are paid every Friday, with one week’s pay being held back by the company. Thus, the first payday for Olney Company is January 14 for the workweek ending January 8 (Saturday).

You will now determine the amount of income tax to withhold for each employee, proceeding as follows:

Time Card No.		Marital Status		No. of Allowances		SIMPLE Deductions
11		S		1		$20
12		S		0		50
13		M		2		40
21		M		3		60
22		S		2		20
31		M		3		40
32		M		4		50
33		S		1		50
51		M		5		30
99		M		7		80

Record the amount of federal income taxes using wage-bracket method.

Record the state income taxes on the gross weekly earnings for each employee. The rate is 3.07% for the state of Pennsylvania.

Record the city income taxes on the gross weekly earnings of each employee. The rate is 1.65% for the city of Allentown residents.

Click here to access the Wage-Bracket Method Tables.

OLNEY COMPANY. Payroll Register
Time Card No.	Name	Martial Status	No of W/H	Earnings	SIMPLE Ded.	FIT	SIT	CIT
11	Mangino, R.	S	1	$740.00	20
12	Flores, I.	S	0	1,058.80	50
13	Palmetto, C.	M	2	685.30	40
21	Waters, R.	M	3	1,045.35	60
22	Kroll, C.	S	2	952.00	20
31	Ruppert, C.	M	3	837.50	40
32	Scott, W.	M	4	780.00	50
33	Wickman, S.	S	1	807.69	50
51	Foley, L.	M	5	1,233.16	30
99	Olney, M.	M	7	1,500.00	80
Totals

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Answer 1

Please note that taxes are determined based on the Wage Bracket Method tables applicable for Year 2018.
OLNEY COMPANY.
Payroll Register
Time Card No.	Name	Martial Status	No of W/H	Earnings $	SIMPLE Ded.	Taxable Wages	FIT *	SIT @ 3.07%	CIT @ 1.65%
										11	Mangino, R.	S	1	740.00	20	720.00	65	22.72	12.21
12	Flores, I.	S	0	1,058.80	50	1,008.80	127	32.51	17.47
13	Palmetto, C.	M	2	685.30	40	645.30	27	21.04	11.31
21	Waters, R.	M	3	1,045.35	60	985.35	56	32.09	17.25
22	Kroll, C.	S	2	952.00	20	932.00	81	29.23	15.71
31	Ruppert, C.	M	3	837.50	40	797.50	34	25.71	13.82
32	Scott, W.	M	4	780.00	50	730.00	19	23.95	12.87
33	Wickman, S.	S	1	807.69	50	757.69	69	24.80	13.33
51	Foley, L.	M	5	1,233.16	30	1,203.16	62	37.86	20.35
99	Olney, M.	M	7	1,500.00	80	1,420.00	69	46.05	24.75
Totals
	* Refering to the wage bracket method table applicable for the year 2018 based on the creiteria of Maritial status, no. of withholding allowances and frequency of wages (weekly, biweekly etc.)