Jim Leary, sales rep for Roy Co., has weekly earnings subject to deductions for Social Security, Medicare, and FIT. Before this payroll, Jim is $500 below the maximum for Social Security. He earns $920 for the week, claims two withholdings, and is married. The FICA rate is 6.2% on $110,100 for Social Security and 1.45% for Medicare.
Using the percentage method, calculate his net pay.

Question

Jim Leary, sales rep for Roy Co., has weekly earnings subject to deductions for Social Security, Medicare, and FIT. Before this payroll, Jim is $500 below the maximum for Social Security. He earns $920 for the week, claims two withholdings, and is married. The FICA rate is 6.2% on $110,100 for Social Security and 1.45% for Medicare.
Using the percentage method, calculate his net pay.

yanasidlinskiy · Answer

Hello. Lets start working off with the Social Security and make our way through.

yanasidlinskiy · Answer

Social Security = .062x $500    = $31.00
Medicare        = 0.145x           = $13.34
                       $920.0
FIT =$920.0

yanasidlinskiy · Answer

FIT = $920.0
                  0
                  = ($55.77x2)
          111.54
          $808.4
                   6
                    =
          124.00
          $684.4
                    6
          x      .15
           $102.6
                     7

yanasidlinskiy · Answer

Net pay = $920 - $31.00 - $13.34 - $102.67 = $722.99

anonymous · Answer

Thank you so much was confused.  But one question...where do you get the 55.77 x 2

yanasidlinskiy · Answer

No problem:)