Employee portion of Social Security tax
A key part of paycheck bookkeeping is the Public Protection tax (The Public Protection tax along with the Medical health insurance tax make up what is generally known as FICA). Public Protection tax is taken out from a worker's wage or income and the company is also required to pay a Public Protection tax. In other terms, the company is accountable for remitting to the administration both the worker and the company associated with the Public Protection tax. As a result, Public Protection tax is both staff retaining and a company cost. (The formal name for the program borrowed by the Public Protection tax is Old Age, Heirs and Incapacity Insurance, or OASDI. As the name indicates, this program will pay pension, disability, family, and survivors' benefits.)
In 2011, the quantity of Public Protection tax that and company must hold from staff is 4.2% of the first $106,800 of the worker's yearly income and salary; any quantity above $106,800 is not topic to Public Protection tax withholdings. For example:
If staff generates $40,000 in income this year, the whole $40,000 is topic to withholdings at 4.2%, for a complete yearly retaining of $1,680.
If a professional generates $300,000 in wage this year, only the first $106,800 of the wage is topic to the Public Protection tax of 4.2%, for a complete yearly retaining of $4,485.60. (The staying $193,200 of wage is not topic to Public Protection tax withholdings, although it will be topic to the Medical health insurance tax mentioned in the next area.)
The quantity withheld—and the company’s portion—is revealed as a current obligation until the volumes are remitted to the got by the company.
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