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!
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!