Question

Gary Marks is paid on a monthly basis. For the month of January of the current year, he earned a total of $8,838. FICA tax for Social Security is 6.2% and the FICA tax for Medicare is 1.45%. The FUTA tax rate is 0.8%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The amount of Federal Income Tax withheld from his earnings was $1,424.97. What is the amount of the employer's payroll taxes expenses for this employee?

Answer 1

Answer: $1,110.11‬

Step-by-step explanation:

The Employer is to pay and withhold all taxes except the income tax withheld so the employer's payroll tax expense will be;

= Social Security Tax + Medicare tax + FUTA + SUTA

= ( 0.062 * 8,838) + ( 0.0145 * 8,838) + ( 0.008 * 7,000) + ( 0.054 * 7,000)

= 547.96 + 128.15 + 56 + 378

= $1,110.11‬

SUTA and FUTA are payable on first $7,000 of an employee's pay.