 In this presentation we will calculate Medicare or HI. We're here in our payroll register. We're currently working with our two employees Bill and Pam. We've got at this point the total earnings. We've also got the FIT earnings support accounting instruction by clicking the link below giving you a free month membership to all of the content on our website broken out by category further broken out by course. Each course then organized in a logical reasonable fashion making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems PDF files and more like QuickBooks backup files when applicable. So once again click the link below for a free month membership to our website and all the content on it and the OASDI earnings want to point out here just the differences between those earnings we're going to scroll to the right a bit so we can see more of what we're concentrating in on here. So we've got the total earnings and then we've got the FIT wages and the OASDI wages and then the HI wages. Now remember that these could differ based on different conditions. The FIT wages would be reduced by the cafeteria plan as well as a 401k or retirement type plan typically are going to be common things that could differ total earnings from FIT wages and therefore differ the number that will be used in order to calculate federal income tax. The OASDI for Social Security will typically be reduced possibly by something like a cafeteria plan and it has this cap. So for example this our second employee hit the cap in this time period and therefore the earnings for OASDI for Social Security for OASDI is much less than total earnings or federal income tax earnings and then we've got the HI which does not have a cap but could still be reduced by the cafeteria plan. So to calculate the earnings that we're going to use in order to calculate HI or Medicare we're going to say this equals total earnings minus 250 for our cafeteria plan and then we'll do the same for our second employee it's going to equal total earnings minus 250 for the cafeteria then we'll sum this up equals the sum double clicking the sum and highlighting those and enter. Okay so then we're going to calculate the employee and employer portion based on the total here first and then go back and calculate them in our register. So it's useful oftentimes to have a vertical calculation as we'll do here so we're going to say that the HI wages is going to be equal to the total and we're going to multiply that times the rate 0.01 or 1.45 percent or 0.0145 1.45 percent we're going to put those over to the right side then this equals this number times the 1.45 that gives us the 56.70 so that's going to be the employee portion then we will of course just do the same thing for the employer portion based on the total the total amount and then we're going to multiply that times 1.041.45 percent i'm just going to show make it so we can see the decimals multiply that out this equals the total times the 1.45 percent and then if we add those two up we're going to say that the total HI then is this employee portion plus the employer portion that gives us the 1.1340 so we're going to do that same calculation over here now doing it by employee so we'll calculate the employees the employees and then add them up and this will add up to hopefully the employee portion and that works out nicely nicely because it's a flat tax here so we're going to say this equals the 506.50 times 0.0145 enter and then we'll do the same thing here this equals the HI Medicare wages times 0.0145 enter then we'll sum them up so it equals SUM double click the sum highlight those two and enter okay we'll do this one more time the employer portion so really on the payroll register we typically only have like the employee portion but we often in a worksheet want to calculate the employer portion as well because we'll need that in order to make the employer payment and enter our journal entries so we're going to say this equals the wages times 0.0145 for our first employee second employee same thing equals the HI wages Medicare wages times 0.0145 then if we add those up with our sum function SUM double click the sum function and add them up and we get our totals of the 56.70 the 56.70 adding up to the total of 113.40