Question

Grace reviewed her payroll stub showing the following information:

Gross Wages: $1250

Income Taxes Withheld: $240

Social Security Tax Withheld: $85

Medicare Tax Withheld: $35

Healthcare Premiums Withheld: $95

Unemployment Tax Withheld: $66

Direct Deposit: 729.

Is her payroll information correct for this pay period? If not­ what is wrong?

Answer 1

Payroll stub for the above information lists:

1. Gross wages of $1250 is useful for federal income tax calculations.

2. Income taxes withheld of $240 is useful for state income tax calculations.

3. Social security tax of $85 is for a system for supplemental retirement programs (6.2%)

4. Medicare tax withheld of $ 35 is for insurance and other plans especially for medical benefits (1.45%)

5. Healthcare premiums withheld of $ 95 is for medical expenses in case any emergency situation occurs.

6. This is the wrong tax withheld information given in the payroll stub as this is paid by the employer from his own pockets.

7. Direct deposit of $ 729 is also included here as any deposit via electronic media is inquired later and based on that any tax implications are done.

So her payroll information is correct for this pay period except Unemployment tax withheld of $66