Question

Anastasia Company recognizes payroll for the month of May. Gross employee income is $200,000; federal taxes withheld are $40,000; state taxes withheld are $6,000; Social security and Medicare taxes are $30,000 total for employer and employees. Employees contribute $10,000 to a 401(k) retirement plan. Federal and state unemployment taxes are $12,000. Anastasia's payroll tax expense will be $12,000. $37,000. $15,000. $27,000.

Answer 1

$27,000.

Step-by-step explanation:

Payroll tax expense = social security taxes + medicare taxes + federal unemployment taxes + state unemployment taxes

• social security and medicare taxes = $30,000 / 2 = $15,000 (both employees and employer contribute 50% of the total amount)
• federal and state unemployment taxes = $12,000 (only employers pay this tax)

payroll tax expense = $15,000 + $12,000 = $27,000