Question

A company has 150 employees, each working 40 hours per week and earning $11 an hour. Although the company does not pay any health or retirement benefits, one of the perks of working at the company is that employees are allowed free skiing on their days off. Federal income taxes are withheld at 15% and state income taxes at 5%. FICA taxes are 7.65% of the first $128,400 earned per employee and 1.45% thereafter. Unemployment taxes are 6.2% of the first $7,000 earned per employee. Required: 1. Compute the total salary expense, the total withholdings from employee salaries, and the actual direct deposit of payroll for the first week of January.

Answer 1

Total salary= 66000

Total Tax = $22,341

Deposit of payroll for the first week of January= $43,659

Refer below for explanation.

Step-by-step explanation:

As per question,

Federal income taxes are withheld at 15% and state income taxes at 5%. FICA taxes are 7.65% of the first $128,400 earned per employee and 1.45% thereafter. Unemployment taxes are 6.2% of the first $7,000 earned per employee.

150 employees, each working 40 hours per week and earning $11 an hour.

40×11=440/week of one worker so, 440×150=66000

Federal Tax = 15%

66,000 ×15% = 9,900

State tax = 5%

66,000×5% = 3,300

FICA tax = 7.65%

66,000 ×7.65%= 5,049

Tax Unemployment= 6.2%

66,000×62% = 4092

Total 9900+3300+5049+4092

= 22,341

Direct Deposit for Payroll 66,000 - 22,341

=43,659

Answer 2

Total salary expense in week 1 = $440 x 150 = $66,000

Total deductions due to taxes = $121.66 x 150 = $18,249

Actual direct deposit of payroll in week is $66,000 minus $18,249 = $47,751

Step-by-step explanation:

Number of employees = 150

Hourly wage = $11

Weekly hours worked = 40 hours

Weekly wage = 40 x 11 = $440 per employee

Taxes deduction:

Federal - 15% of gross earnings = $66

State - 5% of gross earnings = $22

FICA - 7.65% of first #128,400 = $33.66

Total deductions = $121.66

Net Earnings = $318.34