It's the same as why you wouldn't measure your weight in ounces, but neither would you weigh something very light in pounds - you want a convenient number which is easy to interpret. PC is short for parsec and it's a unit of measurement equal to 3,000,000,000,000,000,000 cm!
Take your annual covered earnings (the earnings on which you pay Social Security payroll taxes), multiply it by that year's index factor and you will obtain your indexed wage for each year you have worked. Next, add up all these indexed wages and divide them by 35 to determine your average wage.
Social security and Medicare taxes, also known as FICA taxes must be withheld from your employees' wages. As an employer, you must also pay a matching amount of FICA taxes for your employees. Currently the social security tax rate is 6.2%.You are required to withhold 6.2% of an employee's wages for social security taxes and to pay a matching amount in social security taxes until the employee reaches the wage base for the year. The wage base for social security tax is $97,500 for the year 2007.ou are also required to pay a matching amount of social security and Medicare taxes for your employees and to pay State and Federal unemployment tax. Have each new employee complete IRS form W-4. You will use this form to calculate the amount of federal income tax to withhold from the employee's wages.