Question

Salaries for the month are $480,000; FICA taxes are $36,720; FUTA taxes are $12,100; Federal Withholding is $67,000; Employee Medical premiums are $14,000. What is Payroll Tax Expense?

- $48,820
- $12,120
- $36,720
- $62,820

Answer 1

The Payroll Tax Expense is calculated by adding the employer's contributions to FICA and FUTA taxes, which totals to $48,820 for the given data.

Step-by-step explanation:

The question asks about calculating the Payroll Tax Expense based on the given salaries and deductions.

The Payroll Tax Expense for an employer includes taxes they are responsible for, such as FICA, FUTA, and sometimes state unemployment taxes, but does not include withholdings from employees' paychecks like federal withholding or employee medical premiums.

Therefore, we need to add FICA taxes and FUTA taxes to determine the Payroll Tax Expense. Using the information provided, the Payroll Tax Expense would be the sum of FICA and FUTA taxes which are $36,720 (FICA) + $12,100 (FUTA) = $48,820.