Question

The following information is for employee Robert Ellis for the week ended March 15. Total hours worked: 48 Rate: $15 per hour, with double time for all hours in excess of 40 Federal income tax withheld: $200 United Fund deduction: $50 Cumulative earnings prior to current week: $6,400 Tax rates: Social security: 6% on maximum earnings of $100,000. Medicare tax: 1.5% on all earnings; on both employer and employee State unemployment: 3.4% on maximum earnings of $7,000; on employer Federal unemployment: 0.8% on maximum earnings of $7,000; on employer (a) Determine (1) total earnings, (2) total deductions, and (3) cash paid. (b) Determine each of the employer's payroll taxes related to the earnings of Robert Ellis for the week ended March 15.

Answer 1

1. Total earnings

Normal hours 40 *$15 = $600

Overtime 8 * $30 = 240

$840

2. Total Deduction

United fund deduction 50

social security(6%*840) 50.4

Medicare tax(1.5%*840) 12.6

State unemployment(3.4%*600) 20.4

133.4

3. Cash paid

Total earnings $840

Total Deduction 133.4

706.6

b. employer payroll tax

Medicare tax = 1.5% *840 = $12.6

Federal unemployment tax = (0.8%*600) 4.8

17.4

Step-by-step explanation:

Answer 2

Step-by-step explanation:

(a) Computation of total earnings:

Earnings = (40 x 15) + (8 x 30)

Earnings = 600 + 240

Earnings = $ 840

Computation of total deductions:

Federal Income tax $ 200

United fund deduction 50

Social security tax (840 x 0.06) 50.40

Medicare tax (840 x 1.5%) 12.60

Total 313

Computation of cash paid:

Cash paid = Earnings - deductions

Cash paid =840 - 313

Cash paid = $ 527

(b) Computation of payroll taxes:

Social security and medicare taxes (840 x (6 + 1.5%) $63

State unemployment tax (600 x 3.4%) 20.40

Federal unemployment tax (600 x 0.8%) 4.80

Total 88.20

Total payroll taxes are $ 88.20.