Question

On January 8, the end of the first weekly pay period of the year, Regis Company's employees earned $21,760 of office salaries and $60,840 of sales salaries. Withholdings from the employees' salaries include FICA Social Security taxes at the rate of 6.2%, FICA Medicare taxes at the rate of 1.45%, $12,860 of federal income taxes, $1,360 of medical insurance deductions, and $900 of union dues. No employee earned more than $7,000 in this first period.

Required:
Calculate the amounts for each of these four taxes of Regis Company.

Answer 1

FICA-Social security = $5,121.20

FICA-Medicare = $1,197.70

FUTA = $495.60

SUTA = $4,130

Step-by-step explanation:

Note: The four taxes of Regis Company required to be calculated as follows:

FICA-Social security

FICA-Medicare

FUTA

SUTA

Therefore, we have:

Total earnings = Office salaries + Sales salaries = $21,760 + $60,840 = $82,600

Tax = Total earnings * Tax rate ...................... (1)

Using equation (1), we have:

FICA-Social security = $82,600 * 6.20% = $5,121.20

FICA-Medicare = $82,600 * 1.45% = $1,197.70

FUTA = $82,600 * 0.60% = $495.60

SUTA = $82,600 * 5% = $4,130.00