Ken Gorman is a maitre d\' at Carmel Dinner Club. On February 5, his gross pay w

Question

Ken Gorman is a maitre d' at Carmel Dinner Club. On February 5, his gross pay was $800 (three days working, one paid vacation day, and one paid sick day). He also reported to his employer tips of $900 for the previous month (applicable taxes to be deducted out of his pay). Gorman belongs to the company's 401k plan and has 5% of his gross pay ($800) deducted each week (salary reduction). Carmel Dinner Club also provides matching contribution ($40) into the plan for Gorman. Calculate deduction for OASDI (based on 2012 4.2%) Calculate deduction for HI (based on 1.45%)

Explanation / Answer

(a) $800 + $900 = $1,700 × 0.062 = $105.40

(b) $800 + $900 = $1,700 × 0.0145 = $24.65

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