Question: Additional Medal Points It has been said before ... so how about one more time, practice, practice, practice . Determine the federal withholding for each
Additional Medal Points
It has been said before ... so how about one more time, practice, practice, practice. Determine the federal withholding for each employee.
Lucien Laurin earns $2,190 semimonthly. He claims 4 allowances and is married.
| Employee: Laurin, Lucien | |
|---|---|
| Semimonthly Earnings | $2,190.00 |
| Federal Income Tax Withholding: | $ |
Dale Earnhardt earns $2,294 monthly. He claims 2 allowances and is single.
| Employee: Earnhardt, Dale | |
|---|---|
| Monthly Earnings | $2,294.00 |
| Federal Income Tax Withholding: | $ |
Alex Rodriguez earns $5,385.00 monthly. Additional information necessary to determine Alex's tax withholding can be found on his attached W-4
Note: Enter ALL values as positive numbers.
| Description | Calculation | |||
| 1. | Determine the amount of gross wages, rounded to the nearest dollar. | $ | ||
| 2. | Enter the value of the allowances based on the payroll period. | $ | ||
| 3. | Multiply the allowance value by the employee allowances claimed | () | ||
| 4. | Subtract allowances from gross pay, referred to as excess wages | $ | ||
| 5. | Identify the correct bracket. Wages starting at $ but not over $ | $ () | ||
| 6. | Determine the value over the starting wage for this bracket | $ | ||
| 7. | Multiply the overage by the tax rate in the table (enter as a decimal). | |||
| $ | ||||
| 8. | Add the bracket minimum tax. | |||
| 9. | Add the two amounts together, total withholding for Alex Rodriguez. | $ |
2. PR.04.05B
Example 4-3
To use the wage-bracket method, follow the steps illustrated below.
| Step 1 | ||
| Select the withholding table that applies to the employee's marital status and pay period. | Adrienne Huff is married and claims 3 allowances. She is paid weekly at a rate of $815. | |
| Step 2 | ||
| Locate the wage bracket (the first two columns of the table) in which the employee's gross wages fall. | Locate the appropriate wage bracket (see Figure 4.7): | |
| At least $810 but less than $821 | ||
| Step 3 | ||
| Follow the line for the wage bracket across to the right to the column showing the appropriate number of allowances. Withhold this amount of tax. | Move across the line to the column showing 3 allowances. | |
| The tax to withhold is $35. |
Figure 1.9
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 20, 20--, 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. Hint: If wages are higher than the last amount on the appropriate wage-bracket table, the percentage method must be used.
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.
| Hogan Thrift Shop Payroll Register | |||||||||
| Deductions | |||||||||
| FOR PERIOD ENDING December 20, 20-- | (a) FICA | ||||||||
| Employee Name | Marital Status | No. of W/H Allowances | Total Earnings | OASDI | HI | (b) FIT | (c) SIT | (d) CIT | (e) 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 20, 20--.
| OASDI Taxes | HI Taxes | ||
| OASDI taxable earnings | $ | HI taxable earnings | $ |
| OASDI taxes | $ | HI taxes | $ |
3. PR.04.08B
Figure 1.9
Example 4-9
From the above example, if you indicate separately on Robinsons paycheck stub the amount of each payment, the amount of federal income tax to be withheld is computed as follows:
| Taxes Withheld | |||||
| Regular monthly earnings | $2,400 | $ 37.00 | (from wage-bracket tax tables*) | ||
| Quarterly bonus | 4,600 | 1,012.00 | ($4,600 22%) | ||
| Totals | $7,000 | $ 1,049.00 | |||
The calculation of Robinsons federal income tax for the quarter would be computed as follows:
| Taxes Withheld | |||||
| Regular monthly earnings | $2,400 | $37.00 3 months = | $ 111.00 | (from wage-bracket tables*) | |
| Quarterly bonus | 4,600 | 1,012.00 | ($4,600 22%) | ||
| $1,123.00 | |||||
*The percentage table could also be used.
Note: OASDI and HI withholdings are calculated on total earnings per pay period multiplied by number of pay periods and then added together to arrive at a quarters total withholding. Quarterly and year-to-date information would appear on Robinsons employee earnings record.
The names of the employees of Matson Office Systems and their regular salaries are shown in the following payroll register. Note that Wayne and Young are paid monthly on the last payday, while all others are paid weekly.
In addition to the regular salaries, the company pays an annual bonus based on the amount of earnings for the year. For the current year, the bonus amounts to 8% of the annual salary paid to each employee. The bonus is to be paid along with the regular salaries on December 27, 20--, but the amount of the bonus and the amount of the regular salary will be shown separately on each employee's earnings statement. Assume that all employees received their regular salary during the entire year.
Prepare the payroll for the pay period ending December 27, 20--, showing the following for each employee:
- Use the wage-bracket method to withhold federal income tax from the regular salaries.
- Withhold a flat 22% on the annual bonus.
- Total salaries and bonuses are subject to a 2% state income tax and a 1% city income tax.
Enter all amounts as positive numbers. Round your answers to the nearest cent.
Click here to access the Wage-Bracket Method Tables.
For Period Ending December 27, 20--
| Employee Name | No. of | Earnings | Deductions | ||||||||
| Marital | W/H | (a) | (b) | (c) FICA | (d) | (e) | (f) | (g) | |||
| Status | Allowances | Regular | Supp'l | Total | OASDI | HI | FIT | SIT | CIT | Net Pay | |
| Wayne, Bret | M | 5 | $3,000.00* | $ | $ | $ | $ | $ | $ | $ | $ |
| Young, Gina | M | 2 | 2,500.00* | ||||||||
| Course, Rudy | S | 1 | 810.00 | ||||||||
| Dickson, Emile | M | 4 | 715.00 | ||||||||
| Woodrow, Walt | M | 2 | 695.00 | ||||||||
| Noblet, Jim | S | 1 | 525.00 | ||||||||
| Ono, Joan | M | 2 | 800.00 | ||||||||
| Jones, Carrie | S | 0 | 645.00 | ||||||||
| Totals | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||
*Monthly
Compute the employer's FICA taxes for the pay period ending December 27, 20--.
| OASDI Taxes | HI Taxes | ||
| OASDI taxable earnings | $ | HI taxable earnings | $ |
| OASDI taxes | $ | HI taxes | $ |
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