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

Employee and Employer OASDI:	6.20%	$118,500	$7,347
Employee* and Employer HI:	1.45%	No limit	No maximum
Self-employed OASDI:	12.4%	$118,500	$14,694
Self-employed HI:	2.9%	No limit	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 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.

Example 3-1

The monthly and hourly wage schedule for the employees of Quirk, Inc., follows. No employees are due overtime pay. Compute the following for the last monthly pay of the year:

a. The total wages of each part-time employee for December 2017. b. The OASDI and HI taxable wages for each employee. c. The FICA taxes withheld from each employee's wages for December. d. Totals of columns. (Totals should include both full-time and part-time employees.) e. The employer's FICA taxes for the month.

Employees		Total Monthly Payroll		OASDI Taxable Wages	OASDI Tax	HI Taxable Wages	HI Tax
Full-Time Office:
Adaiar, Gene		$2,450.00		$	$	$	$
Crup, Jason		2,300.00
Essex, Joan		2,975.00
Garza, Irma		2,985.00
Leason, Mel		2,900.00
Pruit, Marne		7,000.00
Rubble, Deanne		2,400.00
Simpson, D		3,985.00
Truap, Ann		5,000.00
Wilson, Trudy		2,440.00

	Hours Worked		Hourly Rate		Total Monthly Payroll		OASDI Taxable Wages		OASDI Tax		HI Taxable Wages		HI Tax
Part-Time Office:
Kyle, Judy	170		$12.50		$		$		$		$		$
Laird, Sharon	170		12.60
Maxwell, Sara	140		14.00
Nelson, Donna	145		14.20
Scott, Kim	162		15.65
Totals (all employees)					$		$		$		$		$

		OASDI		HI
Employer's FICA taxes		$		$