DETERMINING PAYROLL TAX WITHHOLDING

PAYROLL TAXES

Based on employee’s total earnings Employee Income Tax

FICA Taxes Social Security Tax

Medicare Tax

SOCIAL SECURITY AND MEDICARE TAX

Social security Federal tax paid for old-age survivors and disability

insurance.

Medicare tax Federal tax paid for hospital insurance

Both of these taxes are based on percentages. (total earnings * tax percentage)

These taxes are paid by both the employer and the employee.

WITHHOLDING ALLOWANCE

A deduction from total earnings for each person legally supported by a tax payer including the employee.

W-4 EMPLOYEE’S WITHHOLDING ALLOWANCE CERTIFICATE

Name

Marital status

SSN

Withholding Allowances

Date

LESSON 12-2 6

EMPLOYEE’S INCOME TAX WITHHOLDING – MARRIED PERSONS

1

2 3

1. Select the appropriate table.

2. Locate the employee’s total earnings.

3. Intersection of wages and number of allowances column.