Employee earnings records for Slaymaker Company reveal the following gross earni

Question

Employee earnings records for Slaymaker Company reveal the following gross earnings for four employees through the pay period of December 15.

J. Seligman $88,700 L. Marshall $116,000

R. Eby $113,700                         T. Olson $127,000

For the pay period ending December 31, each employee’s gross earnings is $5,300. The FICA tax rate is 6.2% on gross earnings of $117,000, plus an additional 1.45% on all salary and wages without limitation. Compute the FICA withholdings that should be made for each employee for the December 31 pay period. (Round answers to 2 decimal places.)

J. Seligman: $_________     L. Marshall: $__________

R. Eby: $_____________    T. Olson: $____________

Any calculations would be appreciated. Thank you!!

Explanation / Answer

Ok so it is saying $117000 is the limit for FICA taxing soT. Olson is already out so this amount will be $0 since he has already reached the maximum taxable amount, in other words, the 5300 he just earned is completely untaxable.

ForJ. Seligman, adding $5300 to their earnings so far will not take him or her over $117000 so that person gets taxed the 6.2% of the full 5300.

For , L. Marshall of the addable 5300, only 1000 will take L.Marshall to the limit of $117000 so only tax 1000 for the 6.2%.

Same concept for R. Eby seeing that only $3300 is taxable.

J. Seligman: $_328.60_______     L. Marshall: $__62________

R. Eby: $____204.6_________    T. Olson: $____0________

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