Question

Continuing Payroll Problem, 3B: Chapter 3

As you learned in the previous chapter, Olney Company is a small manufacturing firm located in Newtown, Pennsylvania. The company has a workforce of both hourly and salaried employees. In the last chapter, gross wages were computed for each employee. Adjacent to their name, each employee's gross wages are shown in the Payroll Register.

The next task is computing the FICA withholding for each employee and the employer's liability.

Requirements:

1. Compute the OASDI for each employee.
2. Compute the HI for each employee.
3. Compute the employer FICA liability.

Payroll Register

Complete the steps below:

1. Compute the OASDI for each employee.
2. Compute the HI for each employee.
3. Compute the totals for each tax.

Note: Round your final answers to the cent.

OLNEY COMPANY, INC. Employee Payroll Register For Period Ending January 8, 20--
	EARNINGS	DEDUCTIONS									NET PAY
Name	Gross	OASDI	HI	FIT	SIT	SUTA	CIT	SIMPLE	Grp. Ins.	Health Ins.	Ck. No.	Amount
Mangino, R.	$740.00	$	$
Flores, I.	1,058.80
Palmetto, C.	685.30
Waters, R.	1,045.35
Kroll, C.	952.00
Ruppert, C.	837.50
Scott, W.	780.00
Wickman, S.	807.69
Foley, L.	1,233.16
Olney, M.	1,500.00
Totals		$	$								----

Taxable Earnings

In the Totals row, complete the following

1. Enter the earnings upon which the employer FICA liability will be computed.
2. Compute the employer OASDI liability, using 6.2%.
3. Compute the employer HI liability, using 1.45%.

Note: Round your final answers to the cent.

OLNEY COMPANY, INC. Taxable Earnings Payroll Taxes
	Earnings	OASDI	HI	FUTA	SUTA
Totals	$	$	$

Answer 1

Requirement 1
OLNEY COMPANY, INC.
Employee Payroll Register
For Period Ending January 8, 20--
	EARNINGS	DEDUCTIONS
Name	Gross	OASDI
Mangino, R.	$740.00	$45.88
Flores, I.	1,058.80	$65.65
Palmetto, C.	685.3	$42.49
Waters, R.	1,045.35	$64.81
Kroll, C.	952	$59.02
Ruppert, C.	837.5	$51.93
Scott, W.	780	$48.36
Wickman, S.	807.69	$50.08
Foley, L.	1,233.16	$76.46
Olney, M.	1,500.00	$93.00
Total	$9,639.80	$597.67
Requirement 2
OLNEY COMPANY, INC.
Employee Payroll Register
For Period Ending January 8, 20--
	EARNINGS	DEDUCTIONS
Name	Gross	HI
Mangino, R.	$740.00	$10.73
Flores, I.	1,058.80	$15.35
Palmetto, C.	685.3	$9.94
Waters, R.	1,045.35	$15.16
Kroll, C.	952	$13.80
Ruppert, C.	837.5	$12.14
Scott, W.	780	$11.31
Wickman, S.	807.69	$11.71
Foley, L.	1,233.16	$17.88
Olney, M.	1,500.00	$21.75
Total	$9,639.80	$139.78
OLNEY COMPANY, INC.
Taxable Earnings
Payroll Taxes
	Earnings	OASDI	HI
Totals	$9,639.80	$597.67	$139.78