Question

Use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages.

In the first quarter of the year, Henry Gibson earned $3,000 in wages and reported $2,400 in tips to his employer. How much would the employer's FUTA tax be for the first quarter on Gibson?

Answer 1

$32.4

Step-by-step explanation:

According to the scenario, computation of the given data are as follows:

Gross wage in First quarter = $3,000 + $2,400 = $5,400

FUTA tax rate = 0.6%

So, we can calculate the FUTA tax amount by using following formula:

FUTA tax amount = FUTA tax rate × Gross wage in First quarter

= 0.6% of $5,400

= 0.6% × $5,400

= $32.4