Question

Pcd inc. operates as a nevada business. the suta wage base for nevada is $28,200. pcd inc.'s suta tax rate is 4.5%. the employees' annual earnings for the past calendar year are as follows: annabelle $36,750, beatrice $24,880, michael $42,200, howard $26,500. what is pcd inc.'s suta tax liability for the year?

Answer 1

$4,927

Step-by-step explanation:

The computation of tax liability is shown below:-

Suta wage base is $28,200. So, income besides $28,200 is not subject to Suta tax.

Total taxable income = Annabelle + Beatrice + Michael + Howard

= $28,200 + $24,880 + $28,200 + $28,200

= $109,480

Suta tax liability = Total taxable income × Tax rate

=$109,480 × 4.5%

= $4,927

So, for computing the Suta tax liability we simply multiply the total taxable income with tax rate.