In 2015, Willow Corporation had three employees. Two of the employees worked full-time and earned salaries of $25,000 each. The third employee worked only part-time and earned $4,000. The employer timely paid state unemployment tax equal to 5.4 percent of each employee's wages up to $7,000. How much unemployment tax was paid to the state from Willow Corporation for 2015?

Question

Quizplus · Accepted Answer

The first two employees each earned salaries of $25,000, which means $7,000 of each salary is subject to the state unemployment tax.

So for each of the full-time employees:

$7,000 x 0.054 = $378

For the part-time employee:

$4,000 x 0.054 = $216

There were three employees total, so the total unemployment tax paid by the employer would be:

($378 x 2) + $216 = $972

The correct answer is (D) $972.

In 2015, Willow Corporation Had Three Employees