Question

Ted carman worked for rivertide country club and earned $28,500 during the year. he also worked part time for harrison furniture company and earned $12,400 during the year. the suta tax rate for rivertide country club is 4.2% on the first $8,000, and the rate for harrison furniture company is 5.1% on the first $8,000. calculate the futa and suta taxes paid by the employers on carman's earnings. futa suta

a. rivertide country club $ $

b. harrison furniture company $ $

Answer 1

The correct answer is Riverside will pay FUTA - $420 and SUTA - $336. Harrison will pay FUTA - $420 and SUTA - $408.

When completing this question it is important to know that the FUTA tax rate for 2019 is 6% on the first $7,000 of earnings each year.

Riverside Country Club will pay FUTA at 6% of $7,000 and SUTA of 4.2% of $8,000.

FUTA = $420

SUTA = $336

Harrison Furniture Company will pay FUTA at 6% of $7,000 and SUTA of 5.1% of $8,000.

FUTA = $420

SUTA = $408

Answer 2

Futa Tax:

Rivertide Country Club: $42.00

Harrison Furniture Company: $42.00

Suta Tax:

Rivertide Country Club: $336.00

Harrison Furniture Company: $408.00

Step-by-step explanation:

Futa Tax (Federal Unemployment Tax Act):

Rate: 0.6% on the first $7,000 of wages paid in a calendar year.

Rivertide Country Club: $28,500 * 0.6% (capped at $7,000) = $42.00

Harrison Furniture Company: $12,400 * 0.6% (capped at $7,000) = $42.00

Suta Tax (State Unemployment Tax Act):

Rivertide Country Club:

Rate: 4.2% on the first $8,000 of wages paid in a calendar year.

$8,000 * 4.2% = $336.00

Harrison Furniture Company:

Rate: 5.1% on the first $8,000 of wages paid in a calendar year.

$8,000 * 5.1% = $408.00

Therefore, the employers would pay the following FuTa and SuTa taxes for Ted Carman's earnings:

Rivertide Country Club: $42.00 (Futa) + $336.00 (Suta) = $378.00

Harrison Furniture Company: $42.00 (Futa) + $408.00 (Suta) = $450.00