Question

Gary Marks is paid on a monthly basis. For the month of January of the current year, he earned a total of $8,288. 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 $1,375.17. What is the amount of the employer’s payroll taxes expenses for this employee? (Round your intermediate calculations to two decimal places.)

Answer 1

$1,054.04

Step-by-step explanation:

The computation of the employer’s payroll taxes expense is shown below:

= Social security tax + medicare tax + FUTA + SUTA

where,

Social security tax is

= $8,288 × 6.2%

= $513.86

Medicare tax is

= $8,288 × 1.45%

= $120.18

FUTA tax is

= $7,000 × 0.6%

= $42

And, the SUTA tax is

= $7,000 × 5.4%

= $378

So, based on the above calculations, the amount of employer payroll expense is

= $513.86 + $120.18 + $42 +$378

= $1,054.04