An employee's rate of pay is $40.00 per hour, with time and a half for all hours worked in excess of 40 during a week. The following data are available:
Allowances claimed on W-4 4
Allowance amount allowed:$70 ea.
Hours worked this week 50
Y T D Earnings prior 105,200
F I T Withheld $ ??
Social Security tax was withheld @ the rate of 6.2% on the 1st $ 106,400
Medicare tax was withheld @ the rate of 1.45 %
Kipley Company is a small manufacturing firm located in Pittsburgh, Pennsylvania. The company has a workforce of both hourly and salaried employees. Each employee is paid for hours actually worked during each week, with the time worked being recorded in quarter-hour increments. The standard workweek consists of 40 hours, with all employees being paid time and one-half for any hours worked beyond the 40 regular hours.
Below is the payroll register for unemployment taxes (FUTA and SUTA) for the pay of January 14.
To calculate the FIT withheld, we need to follow these steps:
Step 1: Calculate the regular earnings for the week.
Regular earnings = (hours worked - 40) * rate of pay
Regular earnings = (50 - 40) * $40.00 = $400.00
Step 2: Calculate the overtime earnings for the week.
Overtime earnings = (hours worked - 40) * (rate of pay * 1.5)
Overtime earnings = (50 - 40) * ($40.00 * 1.5) = $600.00
Step 3: Calculate the total earnings for the week.
Total earnings = Regular earnings + Overtime earnings
Total earnings = $400.00 + $600.00 = $1000.00
Step 4: Calculate the total YTD earnings.
Total YTD earnings = YTD earnings prior + Total earnings
Total YTD earnings = $105,200 + $1000 = $106,200.00
Step 5: Calculate the taxable amount.
Taxable amount = Total YTD earnings - (Allowances claimed * Allowance amount allowed)
Taxable amount = $106,200 - (4 * $70) = $106,200 - $280 = $105,920.00
Step 6: Calculate the FIT withheld.
To calculate the FIT withheld, we need to use the federal income tax withholding tables provided by the IRS. The amount will depend on the employee's filing status (single, married, etc.) and their taxable income. You can refer to the IRS Publication 15-T for the current withholding tables.
Please note that taxes can be affected by various factors, and it is recommended to consult a tax professional for accurate calculations.
To calculate the FIT (Federal Income Tax) withheld, you will need to consider the employee's taxable income, which is based on their gross earnings and deductions.
First, let's calculate the regular pay for the employee:
Regular pay = 40.00 * 40 = $1,600.00
Next, let's calculate the overtime pay for the employee:
Overtime pay rate = 40.00 * 1.5 = $60.00
Overtime pay = (50 - 40) * 60.00 = $600.00
Now, let's calculate the total earnings for the week:
Total earnings = Regular pay + Overtime pay = $1,600.00 + $600.00 = $2,200.00
Next, let's calculate the taxable income by subtracting the allowances amount allowed from the total earnings:
Allowance amount allowed = 4 * $70 = $280.00
Taxable income = Total earnings - Allowance amount allowed = $2,200.00 - $280.00 = $1,920.00
Now we can calculate the FIT withheld. To do this, you will need to refer to the appropriate tax tables provided by the IRS. The tax tables take into account filing status (such as single or married) and the taxable income.
Look for the tax bracket that matches the employee's filing status and taxable income. The corresponding tax rate from the table will determine the FIT withheld.
Once you determine the tax rate, multiply it by the taxable income:
FIT withheld = Tax rate * Taxable income
Note: The tax brackets and rates can change annually, so you should consult the most recent tax tables provided by the IRS.
To calculate the Social Security tax withheld:
Social Security tax rate = 6.2% *
$106,400 (maximum taxable earnings subject to Social Security tax)
Social Security tax withheld = Social Security tax rate * Total earnings
To calculate the Medicare tax withheld:
Medicare tax rate = 1.45% (applies to the entire earnings)
Medicare tax withheld = Medicare tax rate * Total earnings
Remember to subtract the Social Security and Medicare taxes withheld from the gross pay to get the net pay.
Please note that I cannot provide the exact FIT withheld amount without the specific tax brackets and the employee's filing status. To determine the precise FIT withheld, refer to the IRS tax tables or consult a tax professional.