Question

Assume a tax rate of 6.2% on $128,400 for Social Security and 1.45% for Medicare. No one will reach the maximum for FICA. Complete the following payroll register. (Use the percentage method to calculate FIT for this weekly period.)

Answer 1

Answer:

Claimed 4 allowances at a rate of $76.90 per allowance for weekly payroll.

Taxable income is therefore;

= 3,500 - (76.90 * 4 )

= $‭3,192.4‬0

Federal Income Tax (FIT).

With taxable income of $‭3,192.4‬0, Pat falls into the $3,073 to $4,597 bracket where tax is $565.15 plus 28% of anything above $‭3,073. Status is married.

= 565.15 + (28% * (‭3,192.4‬0 - 3,073))

= 565.15 + 33.43

= $‭598.58

Social Security

= Gross pay * 6.2%

= 3,500 * 6.2%

= $‭217‬

Medicare

= 3,500 * 1.45%

= $‭50.75‬

Net Pay

= 3,500 - 598.58 - 217 - 50.75

= $‭2,633.67‬