eBook Ea calculator Print Note: In this chapter and in all succeeding work throughout the course, unless instructed otherwise, use the following rates, ceiling maximum taxes. Employee and Employer OASDI Employee" and Employer HI: Self-employed OASDI: Self-employed HI: 6.2096 1.45% 12.4% 2.9% $127,200 No limit $127,200 No limit $7,886.40 No maximum $15,772.80 No maximum 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 x 12)/52 - $421.615 rounded to $421.62 Hourly rate $421.62/40 $10.540 rounded to $10.54 .T. rate $10.54 x 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. Example 3-1 Example 3-2 Wallington Company has 100 employees, each earning $525.25 a week. OASDI Amount of OASDI tax withheld from each employee's paycheck each week: Total tax withheld from the 100 employees' wages: Tax on employer: HI Amount of HI tax withheld from each employee's paycheck each week: Total tax withheld from the 100 employees' wages is: Tax on emplover: $32.57 $3,257.00 $3,256.55 (6.2%x $525.25) (532.57 x 100) (6.2% x ($525.25 x 100)] $7.62 (1.45% x $525.25) $762.00 --$761.61 ($7.62 x 100) 11,45%,xs5252sx1oon