Question

Calculate weekly payroll and show work. 1) FIT calculated by percentage method 2) FICA rate: SS- 6.2% on 80,400$ Medicare 1.45% Balance before this payroll is 400$ below max. 3 exemptions claimed. Gross = 1400$ What is net pay?

Answer 1

Dear Friend,

For Calculating FIT by percentage method for 2018, we need to check out the tax tables from IRS in Publication 15. Now let us assume that we are paying for a Single Person and not a married Person.

Since ,our Gross Pay is $ 1400 for Weekly Payroll Period, check out the slab i.e at "Over..But not Over List" at which it falls in the table.

Now you will find the Following:

Over	But Not Over		Of Excess over
$ 815	$ 1,658	$ 85.62 Plus 22%	$ 815

a. Now find the Difference between $ 1,400 and $ 815 and you will be with result of = $ 1,400- $ 815 = $ 585

b. Later, Multiply $ 585 with 22% and output would be = $ 585 * 22% = $ 128.7

c. Finally add $ 128.7 with $ 85.62 arounding to = $ 128.7 + $ 85.62 = $ 214.32 and this is the amount which the Employer is required to withhold from Employee's pay towards Fedaral Income Tax (FIT).

After Computing FIT, we need to Compute FICA Taxes i.e - Social Security and Medicare from Gross Pay

Social Security = $ 1,400 * 6.2% = $ 86.8

Medicare = $ 1,400 * 1.45% = $ 20.3

Therfore, Net Pay should be = $ 1,400 - $ 214.32 - $ 86.8 - $ 20.3

= $ 1,078.58

Note: Here It is ignored calculation of Additional Medicare Tax for Higher Income Individuals as Question specifically asked about FIT, SS and Medicare Taxes.