Question

In preparing the payroll for the week of 17 June 20, Al Bundy was given the following deductions and contributions. Compute the social security payable from the employer’s point of view (Gary’s Shoes) for 17 June 20.

Social Security = 6.2% (cap of $128,400)

Medicare = 1.45% (no cap)

FUTA = 0.6% (cap $7,000)

SUTA = 5.4% (cap $7,000)

Illinois State Income Tax = 5.0% (no cap)

All employees pay health insurance of $15 per week.

All employees pay dental insurance of $5 per week.

Bud Bundy contributes $25 per week to US savings bonds.

Federal withholding given at peg = $41, Bud = $17, and Kelly = $10.

Peg Bundy earned $359 and had a YTD income of $6,895.

Bud Bundy earned $250 and had a YTD income of $7,500.

Kelly Bundy earned $105 and had a YTD income of $128,375.

A) $48.79

B) $54.23

C) $62.15

D) $71.34

Answer 1

To calculate the social security payable from the employer's point of view, calculate the social security contribution for each employee by multiplying their gross income by 6.2%. Cap the contribution at $128,400. Finally, sum up the contributions for all employees to find the total social security payable by the employer.

Step-by-step explanation:

To calculate the social security payable from the employer's point of view, we need to consider the deductions and contributions for each employee. First, we calculate the social security contribution for each employee by multiplying their gross income by 6.2%. However, the contribution is capped at $128,400. Next, we sum up the contributions for all employees to find the total social security payable by the employer.

Let's calculate the social security payable for each employee:

Bud Bundy's social security contribution = $250 (earnings) * 6.2% = $15.50 (capped at $15.50)

Kelly Bundy's social security contribution = $105 (earnings) * 6.2% = $6.51 (capped at $6.51)

Total social security payable by the employer = $15.50 + $6.51 = $22.01.