Question

An employee works 42 hours (42 - 40 were overtime hours) during a workweek in December of 2018. He earns $40.50/hour, with his employer paying 1.5 times the regular rate of pay for overtime hours. To date, he has earned $127,800 during the year. He has requested that his employer withhold 7% of gross pay, which is to be contributed to a 403(b) plan.

Taxable income for federal income tax withholding = $
Taxable income for social security tax = $
Taxable income for medicare tax = $

Answer 1

For 2018, Social security wage limit is $128,400

Gross earning of the period = (40*40.50)+(2*60.75) = $1,741.50

a. Taxable income for federal income tax withholding = Gross Income = $1,741.50

b. Taxable income for social security tax = $128,400 - $127,800 = $600

c. Taxable income for medicare tax = $1,741.50