Question

Employee earnings records for Bramble Company reveal the following gross earnings for four employees through the...

Employee earnings records for Bramble Company reveal the following gross earnings for four employees through the pay period of December 15.

J. Seligman $93,300 L. Marshall $108,500
R. Eby $106,300 T. Olson $139,500


For the pay period ending December 31, each employee’s gross earnings is $4,900. The FICA tax rate is 7.65% on gross earnings of $127,200.

Compute the FICA withholdings that should be made for each employee for the December 31 pay period. (Round answers to 2 decimal places, e.g. 52.75.)

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Answer #1
Calculate FICA holdings for each employee
Total gross salary for each employee
J. Seligman $98,200 93300+4900
R. Eby $1,11,200 106300+4900
L. Marshall $1,13,400 108500+4900
T. Olson $1,44,400 139500+4900
The gross earnings for T.Olson exceeds the limit of $127,200 and thus there would be no FICA withholdings
For other employees gross earnings is below $127,200 and thus there would be FICA earnings
FICA holdings
J. Seligman $374.85 4900*7.65%
R. Eby $374.85 4900*7.65%
L. Marshall $374.85 4900*7.65%
T. Olson $0.00
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