Question

Rick O'Shea, the only employee of Hunter Furniture Company, makes $48,000 per year and is paid once a month. For the month of January, his federal income taxes withheld are $280, state income taxes withheld are $60, social security is 6.2% on a maximum wages of $122,700, Medicare tax is 1.45%, State Unemployment Tax is 5.4%, and Federal Unemployment tax is 0.6%, both on a maximum wages of $7,000 per employee. What is the employer's payroll tax expense associated with Rick's paycheck?

Answer 1

$762

Step-by-step explanation:

Calculation of

Employer Payroll tax expenses can be seen as the additional expenses which are over and above the expense of an employee's gross pay.

Therefore the employer portion of payroll taxes includes Social Security taxes, Medicare taxes, Federal

unemployment taxes (FUTA) and State unemployment taxes (SUTA).

Salary for the month of January $4,000 (48,000/12)

Social Security tax ( 6.2%×4,000) $248

Medicare taxes ( 1.45%*4,000) $58

State Unemployment taxes (5.4%* 4,000)

$216

Federal Unemployment taxes (0.6%*4,000)$240

Total employer's payroll tax expense

=$248+$58+$216+$240=$762

Therefore the employer's payroll tax expense associated with Rick's paycheck will ebe $762