Question

Action Travel has 10 employees each working 40 hours per week and earning $20 an hour. Federal income taxes are withheld at 15% and state income taxes at 6%. FICA taxes are 7.65% and unemployment taxes are 3.8% of the first $7,000 earned per employee. What is the actual direct deposit of payroll for the first week of January

Answer 1

$5,708

Step-by-step explanation:

Computation of the actual direct deposit of payroll for the first week of January

The First step is to find the total salary expenses

Total salary expenses= 10 employees × 40 hours × $20

Total salary expenses= $8,000

Second step is to calculate the actual direct deposit of payroll

Total salary expense $8,000

Federal income tax rate ($1,200)

($8,000*15%)

State income tax rate ($480)

($8,000*6%)

FICA tax rate ($612)

($8,000*7.65%)

Actual direct deposit $5,708

Therefore the actual direct deposit of payroll for the first week of January will be $5,708