Employers not subject to Title VII coverage may come within the scope of the Civil
Rights Act by reason of a contract or subcontract involving federal funds.
A waiter receives cash tips amounting to $120 in a month. The waiter must report the
amount of the cash tips to the employer by the 10th of the month following the month
they receive the tips.
The Social Security Act does not require self-employed persons to have an account
number.
In the IRA form of the Simple Retirement Account, employers must match the
employees contribution, dollar-for-dollar, up to 3% of the employees compensation.
NOTE: In all problems, unless instructed otherwise, compute the hourly and overtime
rates as follows:
1) Carry the hourly rate and the overtime rate to 3 decimal places and then round off to
2 decimal places (round the hourly rate to 2 decimal places before multiplying by one
and one-half to determine the overtime rate).
2) If the third decimal place is 5 or more, round to the next higher cent.
3) If the third decimal place is less than 5, drop the third decimal place.
Also, use the minimum hourly wage of $7.25 in solving these problems and all that
follow. Every two weeks, Linda Corson is paid $650. Corson works a 32-hour week.
For overtime, she receives extra pay at the regular hourly rate up to 40 hours. For any
hours beyond 40 during the workweek, she receives time and one-half. During one
biweekly pay period, she worked 17 hours overtime. Only 3 hours of the overtime were
beyond 40 hours in any one week.
Schedule A of Form 940 only has to be completed by employers who are subject to the
Title XII credit reduction.
NOTE: In all problems, unless instructed otherwise, compute the hourly and overtime
rates as follows:
1) Carry the hourly rate and the overtime rate to 3 decimal places and then round off to
2 decimal places (round the hourly rate to 2 decimal places before multiplying by one
and one-half to determine the overtime rate).
2) If the third decimal place is 5 or more, round to the next higher cent.
3) If the third decimal place is less than 5, drop the third decimal place. Also, use the
minimum hourly wage of $7.25 in solving these problems and all that follow. Kelli
England earns $12.30 per hour and has earned a production bonus this week of $37.10.
If married employees do not claim their marital status on Form W-4, the employer must
withhold according to the withholding tables for single employees.
If wages are paid weekly, postings to the employees earnings record would be done
once a month.
Gere became the father of triplets on June 20. He must file an amended Form W-4 on or
before June 30.
In converting semimonthly wage rates to hourly rates, divide the semimonthly rate by 4
to arrive at the weekly rate, then divide this rate by the standard number of hours.
Even if the duties of depositing the FUTA taxes and filing Form 940 have been
outsourced, the employer is still the responsible party.
There is a uniform rate of unemployment benefits payable by all states.
Retirement pay is taxable wages for FUTA purposes.
NOTE: In the following problems, use the net FUTA tax rate of 0.6% on the first
$7,000 of taxable wages.
Ted Carman worked for Rivertide Country Club and earned $28,500 during the year. He
also worked part time for Harrison Furniture Company and earned $12,400 during the
year. The SUTA tax rate for Rivertide Country Club is 4.2% on the first $8,000, and the
rate for Harrison Furniture Company is 5.1% on the first $8,000. Calculate the FUTA
and SUTA taxes paid by the employers on Carmans earnings.
All major cities have enacted ordinances establishing a so-called living wage at $10.25
per hour.
Note: Use the tables on the following pages to calculate the answers to the problems
listed.
Source: Internal Revenue Service.
Carson Smart is paid $1,200 every two weeks plus a taxable lodging allowance of $100.
He is a participant in the company 401(k) plan and has $150 deducted from his pay for
his contribution to the plan. He is married with two allowances. How much would be
deducted from his pay for federal income tax (using the wage-bracket table)?
FUTA tax deposits cannot be paid electronically.
At the time that the entry is made to record the employers payroll taxes, the SUTA tax is
recorded at the net amount (0.6%).
OASDI taxes are levied when the wages are earned by, rather than when paid to,
employees.