DETERMINING PAYROLL TAX WITHHOLDING. PAYROLL TAXES  Based on employee’s total earnings  Employee Income Tax  FICA Taxes  Social Security Tax  Medicare.

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Presentation transcript:

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

EMPLOYEE’S INCOME TAX WITHHOLDING – MARRIED PERSONS LESSON Select the appropriate table. 2.Locate the employee’s total earnings. 3.Intersection of wages and number of allowances column.