Answer:
Assuming the employee will pay the remaining $250 of their monthly insurance premium, their yearly insurance cost will be:
$250 x 12 months = $3,000 per year
To calculate the total annual salary expense for the employee, we need to add their base salary and the cost of the insurance paid by the employer:
$95,000 + $3,000 = $98,000 per year
To calculate the payroll tax expense for the employee, we need to consider both the employer and employee portions of Social Security and Medicare taxes. The current tax rates for 2023 are:
Social Security tax: 6.2% for the employer and 6.2% for the employee, up to a maximum wage base of $147,000.
Medicare tax: 1.45% for the employer and 1.45% for the employee, with no maximum wage base.
Using these rates and the employee's annual salary of $95,000, we can calculate the payroll tax expense as follows:
Social Security tax: $5,834.00 (6.2% of the first $147,000 of wages)
Medicare tax: $1,377.50 (1.45% of $95,000)
Total employer payroll tax expense: $7,211.50
Total employee payroll tax expense: $7,211.50
Therefore, the total annual salary and payroll tax expense for the employee, assuming the company does not have an IRS-approved health care plan, is:
$98,000 + $7,211.50 = $105,211.5
Step-by-step explanation: