Question

Gary Marks is paid on a monthly basis. For the month of January of the current year, he earned a total of $9,138. FICA tax for Social Security is 6.2% on the first $128,400 of earnings each calendar year and the FICA tax for Medicare is 1.45% of all earnings. The FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The amount of Federal Income Tax withheld from his earnings was $1,516.27. What is the amount of the employer's payroll taxes expenses for this employee

Answer 1

$ 1,119.06

Step-by-step explanation:

It is given that :

Gary Marks total earning = $ 9,138

The social security tax = 6.2%

The Medicare tax = 1.45%

We known, the FUTA and the SUTA must only be applied to the first $7000 earned from Gary's pay.

So, the employer's payroll taxes expenses = Social security + Medicare + FUTA + SUTA

= ($9,138 x 6.2%) + ($9,138 x 1.45%) + ($7000 x 0.6%) + ($7000 x 5.4%)

= 566.56 + 132.5 + 42 + 378

= $ 1,119.06

Therefore, the amount of the employer's payroll taxes expenses is $1,119.06