Question

XYZ Software employed three different salespeople last year. Person 1

earned $3900 in the first quarter, Person 2 earned $20,100 in the first quarter,
and Person 3 earned $6900 in the first quarter. What are the maximum FUTA
deductions for the first quarter?

Answer 1

$1103.60

Explanation:

Answer 2

Total FUTA : $669.6

Explanation:

Given the information

• Person 1 earned $3900 in the first quarter

• Person 2 earned $20100 in the first quarter

• Person 3 earned $6900 in the first quarter

As we know, FUTA is short for Federal Unemployment Tax Act, and the FUTA tax rate is 6.2% applied to a maximum cumulative earnings of $7,000.

So in this situation, only person 1 and 2 must pay FUTA tax because ther earning are lower than $7,000.

• Person 1: 3900 x 6.2% = $241.8
• Person 3: 6,900 x 6.2% = $427.8

=> Total FUTA : $669.6