Question & Answer: PLEASE SHOW CALCULATIONS. That's the only information given…..

PLEASE SHOW CALCULATIONS. That’s the only information given

Bob works for Seymour Engines, which pays employees on a semi-monthly basis. Bob’s annual salary is $120,000. Calculate the following: (Round ”Employer Share Medicare Tax” to the nearest cent.

Pay Date	Prior YTD Earnings	Social Security Taxable Wages	Medicare Taxable Wages	Employer Share Social Security Tax	Employer Share Medicare Tax
November 15	$5,000
December 31	$5,000

Expert Answer

Now as year is not mentioned I will calculate for 2014, 2015 and 2016.
2016
Pay Date	Prior YTD Earnings	Social Security Taxable Wages	Medicare Taxable Wages M	Employer Share Social Security Tax S*6.2%	Employer Share Medicare Tax (M*1.45%)
15-Nov	100000	5000	5000	310	72.5
31-Dec	115000	3500	5000	217	72.5

For 2016 the amount for earnings taxable for social security is $118500. Hence for Dec 31 the
socaila security taxable wages will be (118500-115000)=$3500, no effect on November salary
Note for 2015 and 2016 it is same as the limit is $118500
2014
Pay Date	Prior YTD Earnings	Social Security Taxable Wages	Medicare Taxable Wages M	Employer Share Social Security Tax S*6.2%	Employer Share Medicare Tax (M*1.45%)
15-Nov	100000	5000	5000	310	72.5
31-Dec	115000	2000	5000	124	72.5

For 2014 the amount for earnings taxable for social security is $117000. Hence for Dec 31 the
socaila security taxable wages will be (117000-115000)=$2000, no effect on November salary


Total salary per year	$120,000
	Prior YTD Earnings
So till 15 Nov salary would be	100000
(So till 15 Nov prior year to date earnings would be the earnings as of Oct 30) (20 semimintky payments*5000)
Till Dec 31 prior to year earnings will be till 15 Decemeber hence 23 *5000	115000

If any doubt please comment. If satisfied you can rate the answer.

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