Help! I am stuggling wtih a couple problems on my payroll homework. The assignme

Question

Help! I am stuggling wtih a couple problems on my payroll homework. The assignment is to find the OASDI Taxable Wages, OASDI Tax, HI Taxable Wages, and HI Tax for employees that are paid once a month. I have the annual salary. What makes these two problems hard, is the ceilings at:

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How do I figure out the Taxes for Employee A with an annual salary of $161,280 and employee B with an annual salary of $106,800.

What I though was to divide the annual salary by 12 and then multiply it by the 6.2% and 1.45% to get the taxes, but it was wrong. So I'm lost on the taxable income and Tax.

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Explanation / Answer

Answer: Employee A:

Employee and Employer OASDI=$118500*6.2%=7347

Employee* and Employer HI=161280*1.45%=2338.56

Employee B:

Employee and Employer OASDI=$106800*6.2%=6621.6

Employee* and Employer HI=106800*1.45%=1548.6

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