Payroll deductions 2

• Accounting
• Secondary Education

0

Chapter 12

Section 12.2: Payroll deductions, Pages 318-322

Objectives

Describe the components of FICA.

Analyze the voluntary Payroll deductions.

Discuss the taxes on gross earnings.

Show a video from show me on accounting website

Starting page 7

Which provides
health insurance benefits to people who
are elderly or disabled: Medicare or social
security?

Medical facility

Social security is for old age, disabled and survivors 

For 2010, the maximum taxable earnings amount was $106,800. The maximum amount of social security tax that could be withheld from an employee in that year was?

1. $818.2
2. $5215.30
3. $6200
4. $6621.60

You have just been hired as staff accountants at
$60,000 per year. What amount will
be deducted for social security taxes for the
year?

Answer

$60,000 X.062 =$3,720

What
amount will be deducted for Medicare tax?

1. $145
2. $870
3. $357
4. $560

Voluntary deduction

Most employers agree to deduct other amounts from their employees’ payroll check at the request of the employees. These deductions are withheld from each payroll check until the employee notifies the employer to stop.

Angelo Cappelli, a graphic artist, earns $644 each week and contributes $75 to his 401(k) account. Angelo will pay income tax on what amount?

Problem 12-2: Determine taxes on gross earnings

Information related to the just-completed pay period of MegaCom

Computer Upgrades is provided in the following chart. Determine the

amounts to be withheld from each employee’s gross earnings for FICA

and income taxes. It is a weekly pay period, so use the tables on page 320

to determine the amount of federal income tax to be withheld. The state

income tax is 2% of gross earnings. The social security tax rate is 6.2%,

and the Medicare tax rate is 1.45%. Use the format shown in your working

papers.

Employee                     Marital Status Allowances Gross Earnings

Cleary, Kevin                          S                  0                                  $155.60

Halley, James                        S                   1                                     184.10

Hong, Kim                               S                   0                                    204.65

Jackson, Marvin                  M                   1                                    216.40

Sell, Richard                          M                   2                                   196.81

Total                                                                                                      $957.56

Answer the above question here

Answers

Cleary, K.: $9.65, $2.26, $16, $3.11

Halley, J.: $11.41, $2.67, $12, $3.68

Hong, K.: $12.69, $2.97, $23, $4.09

Jackson, M.: $13.42, $3.14, $6, $4.33

Sell, R.: $12.20, $2.85, $0, $3.94

What are the important terms of the lesson?