Note: For this edition, the 2014 federal income tax tables, FICA rates, OASDI ra
ID: 2469736 • Letter: N
Question
Note: For this edition, the 2014 federal income tax tables, FICA rates, OASDI rate of 6.2% on wages up to $117,000 and the employee and employer HI rate of 1.45% on all wages was used.
Olney Company is a small manufacturing firm located in Allentown, Pennsylvania. The company has a workforce of both hourly and salaried employees. Each employee is paid for hours actually worked during each week, with the time worked being recorded in quarter-hour increments. The standard workweek consists of 40 hours, with all employees being paid time and one-half for any hours worked beyond the 40 regular hours.
Wages are paid every Friday, with one week’s pay being held back by the company. Thus, the first payday for Olney Company is January 14 for the workweek ending January 8 (Saturday).
You will now determine the amount of income tax to withhold for each employee, proceeding as follows:
Record the amount of federal income taxes using wage-bracket method.
Record the state income taxes on the gross weekly earnings for each employee. The rate is 3.07% for the state of Pennsylvania.
Record the city income taxes on the gross weekly earnings of each employee. The rate is 1.33% for the city of Allentown residents.
If required, round your answers to nearest cent and use the rounded answers in subsequent computations. Round your final answers to the nearest cent.
Note: For this edition, the 2014 federal income tax tables, FICA rates, OASDI rate of 6.2% on wages up to $117,000 and the employee and employer HI rate of 1.45% on all wages was used.
Olney Company is a small manufacturing firm located in Allentown, Pennsylvania. The company has a workforce of both hourly and salaried employees. Each employee is paid for hours actually worked during each week, with the time worked being recorded in quarter-hour increments. The standard workweek consists of 40 hours, with all employees being paid time and one-half for any hours worked beyond the 40 regular hours.
Wages are paid every Friday, with one week’s pay being held back by the company. Thus, the first payday for Olney Company is January 14 for the workweek ending January 8 (Saturday).
You will now determine the amount of income tax to withhold for each employee, proceeding as follows:
Record the amount of federal income taxes using wage-bracket method.
Record the state income taxes on the gross weekly earnings for each employee. The rate is 3.07% for the state of Pennsylvania.
Record the city income taxes on the gross weekly earnings of each employee. The rate is 1.33% for the city of Allentown residents.
If required, round your answers to nearest cent and use the rounded answers in subsequent computations. Round your final answers to the nearest cent.
OLNEY COMPANY.Payroll Register Time Card No. Name Martial
Status No of W/H Earnings SIMPLE Ded. FIT SIT CIT 11 Mangino, R. S 1 $740.00 20 12 Flores, I. S 0 1,058.80 50 13 Palmetto, C. M 2 685.30 40 21 Waters, R. M 3 1,045.35 60 22 Kroll, C. S 2 952.00 20 31 Ruppert, C. M 3 837.50 40 32 Scott, W. M 4 780.00 50 33 Wickman, S. S 1 807.69 50 51 Foley, L. M 5 1,233.16 30 99 Olney, M. M 7 1,500.00 80
Explanation / Answer
hours
amount
rate
amount
total
oasdi
tax
fit
Carson, Fran M.
S
1
40
7.50
300.00
-
11.25
300.00
18.60
4.35
11.00
Wilson, William A.
S
0
40
7.25
290.00
8.00
10.88
87.04
377.04
23.38
5.47
27.00
Utley, Harry T.
M
2
37.5
8.10
303.75
-
12.15
-
303.75
18.83
4.40
-
Fife, Lawrence R.
M
4
40
7.90
316.00
6.00
11.85
71.10
387.10
24.00
5.61
-
Smith, Lucy K.
S
2
40
9.75
390.00
-
14.63
-
390.00
24.18
5.66
14.00
Fay, Gretchen R.
M
3
40
515.00
1.25
19.32
24.15
539.15
33.43
7.82
2.00
Robey, Glenda B.
M
6
40
392.31
-
-
-
392.31
24.32
5.69
-
Schork, Thomas K.
S
1
40
542.31
-
-
-
542.31
33.62
7.86
41.00
Hardy, Barbara T.
M
5
40
8.71
348.46
4.00
13.07
52.28
400.74
24.85
5.81
-
Kipley, Carson C.
M
7
40
25.00
1,000.00
-
37.50
-
1,000.00
62.00
14.50
17.00
4,397.83
234.57
4,632.40
287.21
67.17
112.00
hours
amount
rate
amount
total
oasdi
tax
fit
Carson, Fran M.
S
1
40
7.50
300.00
-
11.25
300.00
18.60
4.35
11.00
Wilson, William A.
S
0
40
7.25
290.00
8.00
10.88
87.04
377.04
23.38
5.47
27.00
Utley, Harry T.
M
2
37.5
8.10
303.75
-
12.15
-
303.75
18.83
4.40
-
Fife, Lawrence R.
M
4
40
7.90
316.00
6.00
11.85
71.10
387.10
24.00
5.61
-
Smith, Lucy K.
S
2
40
9.75
390.00
-
14.63
-
390.00
24.18
5.66
14.00
Fay, Gretchen R.
M
3
40
515.00
1.25
19.32
24.15
539.15
33.43
7.82
2.00
Robey, Glenda B.
M
6
40
392.31
-
-
-
392.31
24.32
5.69
-
Schork, Thomas K.
S
1
40
542.31
-
-
-
542.31
33.62
7.86
41.00
Hardy, Barbara T.
M
5
40
8.71
348.46
4.00
13.07
52.28
400.74
24.85
5.81
-
Kipley, Carson C.
M
7
40
25.00
1,000.00
-
37.50
-
1,000.00
62.00
14.50
17.00
4,397.83
234.57
4,632.40
287.21
67.17
112.00
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