Question

In 2016, willow corporation had three employees. two of the employees worked full-time and earned salaries of $25,000 each. the third employee worked only part-time and earned $4,000. the employer timely paid state unemployment tax equal to 5.4 percent of each employee's wages up to $7,000. how much unemployment tax was paid to the state from willow corporation for 2016

Answer 1

Unemployment taxes are levied on the FIRST 7,000 of an employees wages paid each year.

So for the fulltime employees, you only count 7,000 of their salaries.

The corporation will pay taxes on 14,000 for full-time and 4,000 from part-time or 28,000 total. If the rate is 5.4%, the total taxes paid will be

28,000*5.4% = $1,512