Exam 7: Payroll and Income Tax

The percentage method aids in calculating:

Jim Push, a manager for Marvy Co., has weekly earnings subject to deductions for Social Security, Medicare, and FIT. Before this payroll, Jim is $500 below the maximum level for Social Security. What will his net pay be if he earns $760? Jim is married and claims one exemption. Use the percentage method. Assume a FICA tax rate of 6.2% on $106,800.

The taxable earnings column of a payroll register records:

Jim Dashinger is a salesman who receives a $100 draw per week. He receives a 12 1/2% commission on all sales. Sales for Jim for the month were $28,000. What did Jim receive after taking the draw into consideration? (Assume a five-week month.)

Jill is $200 from reaching maximum base as related to cumulative earnings for Social Security. She is paid weekly:

To date, Jay Ward has cumulative earnings of $107,600. This week he is paid $3,000. The total amount of Social Security tax for this week is (assume a rate of 6.2% on $110,100 for Social Security and 1.45% for Medicare):

Janice Tax, an accountant for Flee Corp., earned $102,700 from January to June. In July she earned $8,000. Assuming a FICA tax rate of 6.2% for Social Security on $110,100 and 1.45% for Medicare, (A) how much of this month's earnings are taxed for Social Security and Medicare? and (B) what is the amount of FICA tax for Social Security and Medicare?

Being paid biweekly is the same as being paid semimonthly.

In the portion formula, the commission a worker receives would be the base.

Rolf Company pays its employees on a graduated commission scale: 1% on the first $25,000 sales, 3% on sales from $25,001 to $95,000, and 5% on sales greater than $95,000. If John Jones, an employee of Rolf, had sales of $100,000, what commission did John earn?

SUTA tax has no maximum amount that can be paid in a calendar year.

The higher the number claimed on form W-2, the less in taxes will be taken out of one's paycheck.

Social Security and Medicare tax:

Sonny Siebert earned $485,000 a year as a rookie pitcher for the Cleveland Indians. Assuming a tax rate of 6.2% for Social Security up to $110,100 and Medicare tax of 1.45%, how much did Sonny pay in FICA taxes as a rookie pitcher?

Bill Burton earns $750 per week plus 5% of sales in excess of $7,500. If Bill sells $34,000, how much are his earnings?

Jim Long earned $1,900 biweekly. He claims two exemptions and is married. As his accountant, calculate his federal income tax deduction. Use the percentage method.

A merit rating system for SUTA means:

Net pay - deductions = gross pay.

Mike Goldsmith is paid $6.40 per hour. Last week he worked 40 hours, and this week 60 hours. Calculate Mike's pay for each week (time and a half over 40 hours):

Ron Smith has cumulative earnings of $110,100. This week he is paid $2,000. Assuming the Social Security rate is 6.2% on $107,900 and is 1.45% for Medicare, what is the amount of Social Security and Medicare taken out of Ron's earnings?