Expert: Shirley McAllister, CPP, PHR - 6/23/2011

Question
Hi Shirley,

First of all, this is not a homework question, it is matter of eating and not eating; secondly, you have not answered this question before.  (Shirley, I state that because other AllExperts have answered some of my questios that way). (For example: I ask a question - The AllExpert writes back and says that "I don't do homework questions."  I reply and state that this is not a homework question.  The AllExpert then writes back and says that "I've answered this question before."  I reply and state that this question has never been answered before.  The AllExpert writes back and says, "I only take 3 responses to each issue - sorry.")

I earn $1,250.00 per week/Net: $884.16.  These are the taxes withheld:
1) Federal Income Tax: $210.10/ what percentage of 1,250 = 210.10?
2) Social Security:           $52.50/ what percentage of 1,250 = 52.50?
3) Medicare:              $18.13/ what percentage of 1,250 = 18.13?
4) CA Income Tax:   $70.11/ what percentage of 1,250 = 70.11?
5) CA State Disability Ins: $15.00/ what percentage of 1,250 = 15.00?

So I all of my taxes = $365.84/ what percentage of 1,250 = 365.84?

My net pay = $884.16.  The reason I ask is because I think I should be earning more than $884.16 net pay.


Sincerely,
Angel

Answer
How the withholding is calculated from your pay depends on how you have filled out your W-4 form. It is not on a percentage of pay but on the number of deductions and on the filling status (single or married) that you have filled out on your W-4 form. The more deductions the less withheld.

It makes a huge difference in how the withholding is calculated. It is all done on the computer and the W-4 information tells the computer what to withhold from your paycheck.

The gross of 1250 with W-4 of Single and 1 withholding is 209.00 on the chart. If annual tables are used it may round a bit higher so 210 is only a dollar more which is the difference in paper tables and computer tables. This looks correct to me

Social Security is reduced to 4.2% for employees for a short amount of time so it would be 52.50 for social security yours is correct.

Medicare is 1.45% so it would be a total of 18.13 which is correct.

State I cannot figure because I do not have California tax tables. I am not in California.

It looks like the taxes are correct...all the federal taxes are correct.

The percentages do not matter, but I will answer your question:

1) Federal Tax 210.00 is 16.8%
2) Fica (SS Tax) 52.50 is 4.2%
3) Medicare Tax 18.13 is 1.45%
4) CA income tax 70.00 is 5.6%
5) CA Disability tax 15.00 is 1.2%

6. All Taxes are equal to 29.2%

This sounds very correct to me a single person generally pays 30% taxes.  In a few months the Social Security tax will be back up to 6.2 it is only reduced for a few months because of the recession. It will be 77.50 when it goes back up.

You can find the tax tables on the website www.irs.gov in Circular E.

Shirley


Shirley