Question

Dena's Decorations is a South Carolina business that has a SUTA rate of 3.6% and an annual SUTA wage base of $14,000. The employee earnings for the past calendar year are: B. Gilfilan $22,180, P. Laubach $37,690, S. Loftin $15,320, M. Moravec $9,840. (Assume that all employees have exceeded the annual FUTA wage base of $7,000 per employee and that the FUTA rate is 0.6%.) What are the FUTA and SUTA tax liabilities for Dena's Decorations?

Answer 1

FUTA = $168

SUTA = $1,866.24

Step-by-step explanation:

As per the data given in the question,

FUTA

= $7,000 × 4 employees × 0.6% = $168

SUTA

Gilfin, Laubach and Loftin earning excess = $14,000

So, will take maximum $14,000 for each of them

Moravec is less than $14,000 therefore will take the actual amount

Earnings = ($14,000 × 3 × 3.6%) + ($9,840 × 3.6%)

=$1,866.24