How do I calculate FICA taxes on an annual salary, if the person was paid a semi-monthly salary of $6800.00. What's withheld from the 9th paycheck? The 16th paycheck?:confused:

The tax rate for FICA is 6.2%, and for Old Age, Survivors, and Disability Insurance(OASDI) it's 1.45%. FICA is withheld on wages up to a max of $97.5K/year, so once you have contributed $6045 in calendar year 2008 the FICA withholding is zero. OASDI continues at 1.45% regardless of how much you earns in a year. So for someone making $6,800 per two week period, by the 15th pay period FICA should be zero.

Your FICA wages are basically your salary minus contributions to health and dental insurance and health savings accounts, plus the cost of some non-wage benefits such as a portion of the value of term life insurance your company may provide. Note that if you contribute to a 401(k) plan the amount is included in your FICA wages but not in your federal wages.

Keep in mind that the 9th paycheck actually has 8 paychecks included in year-to-date. So what you really want to know is how much 8 paychecks is adding up to. Then look at whether the 9th paycheck is taking it over the limit for social security. Do the same for the 16th paycheck. Year-to-date is actually for 15 checks. Then again, see if it's already over, and if not, will the 16th check put it over the limit.

OASDI is the same as medicare and most books I know of still call it medicare. (In fact, I never heard the term OASDI until a year or so ago.)

Also, ebaines, just as a note, books many times use a limit that is different from the real one, so we can't assume the real one is the one to be used. For one thing, textbooks are usually good for 3 years and they just have to pick a number. Nor can we assume they are using the 6.2%. They sometimes over-simplify. They may be using the real numbers, but many times don't.

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Originally Posted by morgaine300

Also, ebaines, just as a note, books many times use a limit that is different from the real one, so we can't assume the real one is the one to be used. For one thing, textbooks are usually good for 3 years and they just have to pick a number. Nor can we assume they are using the 6.2%. They sometimes over-simplify. They may be using the real numbers, but many times don't.

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I was answering the question for real, using 2008 rates and limits, not as if it comes from an out-of-date text book.

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Originally Posted by ebaines

I was answering the question for real, using 2008 rates and limits, not as if it comes from an out-of-date text book.

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Textbooks don't have to be out-of-date to do this. They're trying to over-simplify things. And a book that lasts for three years can't possibly have the correct limit when it changes every year.