Question

Thomas Longbow is the only employee of Presido, Inc. During the first week of January, Longbow earned $1,200.00 and had federal and state income tax withholdings of $60.00 and $22.50, respectively. FICA taxes are 7.65% on earnings up to $117,000. State and federal unemployment taxes for the period are $75.00 and $12.00, respectively. What is Presido's payroll tax expense for the week?

Answer 1

Answer: $178.80

Step-by-step explanation:

In calculating Presido's payroll tax expense for the week, the following needs to be stated.

As the employer, Presido is not liable to pay the federal and state income tax withholdings of $60.00 and $22.50, respectively.

However they have to pay the FICA taxes of 7.65% on earnings up to $117,000 as well as the state and federal unemployment taxes for the period of $75.00 and $12.00, respectively.

So calculating we have,

= 75 + 12 + (1,200 * 7.65%)

= $178.8

Presido's payroll tax expense for the week is $178.80