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

Example 3-2

Wallington Company has 100 employees, each earning $525.25 a week.

OASDI
Amount of OASDI tax withheld from each employees paycheck each week:		$32.57		(6.2% $525.25)
Total tax withheld from the 100 employees wages:		$3,257.00		($32.57 100)
Tax on employer:		$3,256.55		[6.2% ($525.25 100)]
HI
Amount of HI tax withheld from each employees paycheck each week:		$7.62		(1.45% $525.25)
Total tax withheld from the 100 employees wages is:		$762.00		($7.62 100)
Tax on employer:		$761.61		[1.45% ($525.25 100)]

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.

Employee	Annual Salary	OASDI Taxable Wages	OASDI Tax	HI Taxable Wages	HI Tax
Utley, Genna	$37,040	$	$	$	$
Werth, Norm	48,900				$
Bass, John	40,000				$
Ruiz, Sam	120,000				$
Compton, Sue	36,900				$
Williams, Mary	48,500				$
Patel, Raymond	106,080				$
Carson, Abe	56,900				$
Livinsky, Sarah	37,850				$
Harper, Mark	51,200				$
Totals	583,370	$	$	$	$

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