Question

Phil Phoenix is paid on a monthly basis. For the month of January of the current year, he earned a total of $9,138. FICA tax for Social Security is 6.2% and the FICA tax for Medicare is 1.45%. The FUTA tax rate is 0.8%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The amount of Federal Income Tax withheld from his earnings was $1,516.27. What is the amount of the employer's annual payroll taxes expenses for this employee?

Answer 1

the amount of employers annual payroll taxes expenses for his employee is $1133.06

Step-by-step explanation:

For calculating the employers payroll taxes expenses for his employee , we will add the amount that he has to pay for in social security tax, medicare tax and Federal unemployment tax act and State unemployment tax act tax.

EMPLOYERS PAYROLL TAX =

Social security tax + Medicare tax + FUTA tax + SUTA tax

An important point to understand here is that the social security tax and medicare tax would be calculated on the income earned by Phil in month of January and the FUTA(federal unemployment tax act) and SUTA(state unemployment tax act) taxes would be calculated on the first $7000 of Phil as it is given in the question that the unemployment taxes are calculated on first $7000 of employee.

= $9138 x 6.2% + $9138 x 1.45% + $7000 x .08% + $7000 x 5.4%

= $566.556 + $132.501 + $56 + $378

= $1133.057

= $1133.06 (approximate)