# FICA tax calculation with wage cap

#### EHC

##### New Member
Good afternoon,

First time poster and would appreciate some guidance on this topic.

I have to calculate the FICA tax liability for an institution. I have the salary information for all the employees. I need to figure this out on a monthly basis. The issue is that FICA is calculated using two separate rates. The first \$106,800 is taxed at 7.65% and the remaining income is taxed at 1.45%. So just for illustration purpose, lets say the person makes \$50,000 per month.

The first two months of income will be taxed at 7.65% but then in the third month, some of the income (up to \$106,800 cumulatively) will be taxed at 7.65% and the remainder of the income in the third month (and going forward since they hit the \$106,800 cap) will be taxed at 1.45%.

Is there a way to set up a formula for this? My issue, in this illustration, is that in the third month i can either tax it at one of the two rates and not a portion of the income at one rate and the other portion at the other rate.

Thanks!

### Excel Facts

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Prevent GETPIVOTDATA. Select inside a PivotTable. In the Analyze tab of the ribbon, open the dropown next to Options and turn it off

#### dave3009

##### Well-known Member
Hi and Welcome

Something like this?
Excel Workbook
ABC
1MonthPaymentTax
21500003825
32500007650
43500008796.6
54500009521.6
Sheet3
Excel 2007
Cell Formulas
RangeFormula
C2=IF(SUM(\$B\$2:B2)<106800, SUM(\$B\$2:B2)*0.0765, (106800*0.0765)+(SUM(\$B\$2:B2)-106800)*0.0145)

#### EHC

##### New Member
Thanks for the help guys. JoeMo, i think you showed what i'm looking for. I'm going to give it a try, but it looks good. Thanks to both of you!

Excel contains over 450 functions, with more added every year. That’s a huge number, so where should you start? Right here with this bundle.

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