In this chapter and in all succeeding work throughout the course, unless instructed otherwise, use the following rates, ceiling, and maximum taxes.

1. Carry the hourly rate and the overtime rate to 3 decimal places and then round off to 2 decimal places (round the hourly rate to 2 decimal places before multiplying by one and one-half to determine the over-time 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, simply drop the third decimal place.
Examples: Monthly rate $1,827
Weekly rate ($1,827 × 12)/52 = $421.615 rounded to $421.62
Hourly rate $421.62/40 = $10.540 rounded to $10.54
O.T. rate $10.54 × 1.5 = $15.81
Also, use the minimum hourly wage of $7.25 in solving these problems and all that follow.
*Employee HI: Plus an additional 0.9% on wages over $200,000. Also applicable to self employed.
Wallington Company has 100 employees, each earning $525.25 a week.

Empty Fields Company pays its salaried employees monthly on the last day of each month. The annual salary payroll for 20-- follows. Compute the following for the payroll of December 31:
If required, round your answers to nearest cent and use the rounded answers in subsequent computations. Round your final answers to the nearest cent.

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

Employee and Employer OASDI: 6.20% S7,347 $118,500 Employee* and Employer HI: Self-employed OASDI: No limit No maximum 1.45% $118,500 $14,694 12.4% Self-employed HI: No limit 2.9% No maximum OASDI Amount of OASDI tax withheld from each employee's paycheck $32.57 (6.2% x $525.25) each week: Total tax withheld from the 100 employees' wages: $3,257.00 ($32.57 x 100) Tax on employer: $3,256.55 [6.2% x ($525.25 x 100)] HI Amount of HI tax withheld from each employee's paycheck $7.62 (1.45% x $525.25) each week: Total tax withheld from the 100 employees' wages is: $762.00 ($7.62 x 100) Tax on employer: $761.61 [1.45% x ($525.25 x 100)]