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

At Vision Club Company, office workers are employed for a 40-hour workweek on either an annual or a monthly salary basis.

Given on the form below are the current annual and monthly salary rates for five office workers for the week ended December 8, 2017 (50th payday of the year). In addition, with this pay, these employees are paid their sliding-scale annual bonuses. The bonuses are listed on the register.

For each worker, compute:

Regular earnings for the weekly payroll ended December 8, 2017.

Overtime earnings (if applicable).

Total regular, overtime earnings, and bonus.

FICA taxable wages for this pay period.

FICA taxes to be withheld for this pay period.

VISION CLUB COMPANY
Weekly Payroll for Period Ending December 8, 2017
											FICA Taxable Wages This Pay Period		FICA Taxes to Be Withheld
Employee	Salary		Hours Worked	Annual Bonus	Regular Earnings	Overtime Earnings	Total Earnings	Cumulative Earnings as of Last Pay Period			OASDI	HI	OASDI	HI
Marx, A.	$112,320/yr.		40	$48,000	$		$	$105,840
Boxer, C.	70,200/yr.		40	23,200				66,150
Lundy, R.	6,292/mo.		40	16,000				71,148
Ruth, B.	3,900/mo.		40	14,400				44,100
Gehrig, L.	5,148/mo.		48	5,800		$		58,212
Totals				$	$	$	$				$	$	$	$

Employer's FICA taxes for week ended December 8, 2017:

$		$
OASDI		HI