Final answer:
In the given scenario, the employer would calculate and record the September payroll liabilities for Social Security at 6.2% and for Medicare at 1.45% of the employee's September gross pay of $1,500, as well as the employer's FUTA and SUTA taxes, where applicable.
Step-by-step explanation:
Payroll Taxes and Journal Entries
When calculating the employer’s payroll liabilities, it is essential to understand that both the employer and the employee are responsible for contributing to FICA Social Security and FICA Medicare taxes. For Social Security, the tax rate is 6.2% of the first $137,700 of the employee's gross pay, while for Medicare, the tax is 1.45% of the gross pay with no wage limit. Additionally, FUTA (Federal Unemployment Tax Act) and SUTA (State Unemployment Tax Act) taxes are paid by the employer at the rates of 0.6% and 5.4% respectively, of the first $7,000 paid to the employee.
In situation (a), the employee's gross pay for September is $1,500. The FICA Social Security tax for this amount is 6.2% and the FICA Medicare tax is 1.45%. The employee's gross pay through August is not relevant for calculating September's taxes, as these payroll taxes are calculated on the current month's earnings only. As of September 30, the employer would record the salary expense for $1,500, with additional journal entries for the employer's portion of Social Security and Medicare taxes.