Question

BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $118,500 paid to its employee, and FICA Medicare taxes are 1.45% of gross pay. For BMX, its FUTA taxes are 0.6% and SUTA taxes are 2.9% of the first $7,000 paid to its employee. Gross Pay through August Gross Pay for September a. $ 5,400 $ 2,400 b. 19,100 3,000 c. 113,100 8,900

Answer 1

Gross Pay through August 31 Gross Pay for September

A. $5,400 $2,400

B. $19,100 $3,000

C. $113,100 $8,900

For A)

Taxes to be withheld from employee:

FICA - Social Security = $2,400 x 6.2% = $148.80

FICA - Medicare = $2,400 x 1.45% = $34.80

Taxes to be paid by employer:

FICA - Social Security = $2,400 x 6.2% = $148.80

FICA - Medicare = $2,400 x 1.45% = $34.80

FUTA = ($7,000 - $5,400) x 0.6% = $9.60

SUTA = ($7,000 - $5,400) x 5.4% = $86.40

B)

Taxes to be withheld from employee:

FICA - Social Security = $3,000 x 6.2% = $186

FICA - Medicare = $3,000 x 1.45% = $43.50

Taxes to be paid by employer:

FICA - Social Security = $3,000 x 6.2% = $186

FICA - Medicare = $3,000 x 1.45% = $43.50

FUTA = $0

SUTA = $0

C)

Taxes to be withheld from employee:

FICA - Social Security = ($118,500 - $113,100) x 6.2% = $334.80

FICA - Medicare = $8,900 x 1.45% = $129.05

Taxes to be paid by employer:

FICA - Social Security = ($118,500 - $113,100) x 6.2% = $334.80

FICA - Medicare = $8,900 x 1.45% = $129.05

FUTA = $0

SUTA = $0