Question

The new Finance Manager, Rose Wilson, does not have experience with payroll and has requested that you explain how the statutory deductions are calculated.

Write a memo to Rose explaining what the statutory deductions consist of and by what methods they may be determined.

Answer 1

Answer The Page No 0 payool! decluctions include the following statiborg core) → Social Security bax of 6-a 4. upto the annual marimim barable earnings → Medicare bax withhol ding of 1.45% → Payoroll taxes, fedenial income tax with holding of publi tabion 15 a state income fax coif applicable) → (if applicable) local teise with hofdings such as coliy, counting, Schoof dielict toxes & shadle disabilila . To determine the federal. Income tax amount din employee's W-4 form is used the federal income fax amount varies by employee. . State income tax (if applicable) depends on the emplo -yees sfate income tax form and isbate withholdings baz tables.

- Page. No The above two are federal income tax ę sfate income tax (if applicable) are used to determine statutory dedu -etions. There are primarily two methods' to determine the withholdings and then deductions . O. Percentage method Wages bracket method.